October 23, 2026 | By August M. Iorio | Iorio Law PLLC

Updated October 23, 2026, incorporating the October 23 docket review.

Since our October 12 IHC Bankruptcy Monitor update, the Bankruptcy Court has entered property-specific sale orders and approved agreements with three secured lenders. Those developments move Inspired Healthcare Capital’s bankruptcy forward, but they do not establish how much Delaware statutory trust investors will recover. Read the October 12 update.

The most consequential new development for Fort Myers DST investors is the court’s October 20 approval of an agreement involving mortgage lender Stride Bank, the Debtors, and both official creditor committees. Separate agreements involving Pinnacle Bank and Provident Bank could affect several other DSTs.

The agreements’ economic terms remain sealed. Investors therefore should not assume that the lenders reduced their claims or that money has been set aside for beneficial-interest holders.

Meanwhile, the previously disclosed financial figures continue to raise particularly serious concerns for Fort Myers, Delray Beach, and Melbourne. Under those figures, the sale proceeds are insufficient to cover the lenders’ asserted payoffs and identified expenses. Grapevine presents a different picture: a positive preliminary remainder, but unresolved questions about allocation and the amount ultimately available to investors.

What Has Changed Since October 12?

Two developments distinguish this update from our last report.

First, the court entered written sale orders on October 13. These include Dkt. 1972 covering Fort Myers, Delray Beach, Dunedin, Melbourne, Largo, and Pinellas Park; Dkt. 1971 covering Augusta, Augusta vacant land, and Reno; and Dkt. 1973 covering Eugene, Las Vegas, and Grapevine.

Additional entered orders cover other communities, including Naperville, North Haven, Hamilton, Dartmouth, Candle Light Cove, New Braunfels, San Marcos, Round Rock, Brookhaven, Athens, Arlington Heights, and Eatonton.

Second, the court approved three lender stipulations on October 20. Dkts. 2080–2082 concern Stride, Pinnacle, and Provident, respectively.

An entered sale order authorizes a transaction. It does not, standing alone, establish that the transaction closed, that all proceeds were allocated, or that investors received a distribution. The materials reviewed for this update do not establish a finalized DST-by-DST recovery schedule.

Which IHC DSTs Face the Clearest Property-Sale Loss Concerns?

The financial information in the Debtors’ October 9 collateral-surcharge motion, Dkt. 1920, remains an important starting point. These are previously disclosed figures—not new October 20 settlement terms.

Amounts are rounded. The final column is illustrative arithmetic, not a court-approved distribution calculation. Payoff figures have different calculation dates, remain subject to dispute, and may be affected by subsequent agreements. The table does not resolve allocation between DSTs and affiliated operating entities.

The strongest inference from these figures is that Fort Myers, Delray Beach, and Melbourne investors face a substantial risk of losing significant principal, potentially including all amounts otherwise recoverable from residual property-sale proceeds. They do not establish final losses across every possible recovery source.

Fort Myers: A New Stride Agreement, but No Public Recovery Answer

Fort Myers illustrates why the October 20 agreements matter.

The previously disclosed $13.2 million sale price exceeds Stride Bank’s asserted $12,609,561 payoff by just $590,439. Identified expenses of $1,493,277 exceed that difference by $902,838.

On that calculation, there is no positive residual after paying both the asserted payoff and identified expenses in full.

The Debtors requested a $902,838 surcharge against Stride’s collateral. That request is intended to shift qualifying expenses to the lender’s collateral; it is not an additional expense on top of the $1.49 million.

On October 20, the court entered Dkt. 2080, approving a stipulation involving Stride, the Debtors, the Official Committee of Unsecured Creditors, and the Official Committee of DST Investors. The underlying stipulation was filed under seal at Dkt. 2067.

That is a meaningful development. However, the available information does not establish whether Stride reduced its payoff, agreed to a particular proceeds allocation, released held-back funds, or resolved the surcharge request.

The appropriate assessment is that Fort Myers continues to present serious principal-loss concerns, while the effect of the approved lender agreement remains unknown.

The previously identified $5 million holdback is not a promised investor recovery. It concerns proceeds subject to competing claims, rather than a separate pool that can simply be added to investor equity.

Delray Beach: The Asserted Debt Exceeds the Sale Price Before Expenses

For Delray Beach, the reported $26.1 million sale price falls approximately $2.8 million below the lender’s asserted $28.9 million payoff—even before expenses.

Adding approximately $2.06 million in identified expenses produces an illustrative shortfall approaching $4.87 million.

Those figures provide a concrete basis for concern that the property sale will leave no residual equity for DST investors if the asserted debt and identified costs are paid in full.

That conclusion remains conditional. Disputes over liens, lender claims, expense treatment, and proceeds allocation can affect the outcome. The figures nevertheless show why sale approval alone offers little assurance of principal recovery for Delray Beach investors.

Melbourne: A Particularly Large Gap Between Sale Price and Asserted Debt

Melbourne’s reported $10 million sale price is approximately $6.25 million below the lender’s asserted $16.25 million payoff. Identified expenses of approximately $1.32 million increase the illustrative shortfall to roughly $7.57 million.

This is a substantial gap before considering any return of investor capital.

The court’s October 20 approval of the Pinnacle stipulation at Dkt. 2081 is therefore relevant. Pinnacle is the successor by merger to Synovus, whose documented lending relationships include Melbourne, Brookhaven, and Reno.

However, the underlying agreement at Dkt. 2060 is sealed. Its precise scope and treatment of Melbourne cannot be determined from the approval alone.

Melbourne presents a serious risk of little or no residual property-sale recovery for beneficial-interest holders under the previously disclosed figures. Whether the approved agreement changes that assessment materially remains an unanswered question.

Grapevine: A Positive Preliminary Remainder Is Not Full Principal Recovery

Grapevine differs from the other three properties.

Its reported $18.125 million sale price exceeds the approximately $15.57 million asserted payoff and $1.12 million of identified expenses by roughly $1.44 million.

That positive remainder does not establish an investor distribution. Allocation between the DST and affiliated entities remains important, and the extent and priority of HPI’s liens are disputed in Adversary Proceeding No. 26-09012.

Nor does a positive remainder establish that investors will recover their original principal. That requires comparing the amount actually distributable to beneficial-interest holders with their invested capital.

The available information supports concern about Grapevine’s recovery, but does not support a reliable investor-loss percentage or a conclusion that its outcome will match Fort Myers, Delray Beach, or Melbourne.

Other DSTs Potentially Affected by the Lender Agreements

The October 20 approvals extend beyond Fort Myers.

These relationships identify properties worth monitoring. They do not establish that every listed DST received a concession or will sustain a particular loss.

For Augusta and Eugene, the October 13 sale orders are a procedural advance. The materials reviewed do not supply a new finalized distribution calculation for either DST. The shortfalls at Fort Myers, Delray Beach, and Melbourne should not be applied to them without property-specific evidence.

Financing and Interest Claims Remain Important

On October 20, the Debtors filed Dkt. 2085, seeking a Third Final Order concerning postpetition financing and cash-collateral use. The request includes liens, superpriority administrative claims, and protections for secured creditors.

The reviewed notice identifies a November 13 objection deadline and a November 17 hearing at 10:30 a.m. Eastern.

Separate Pinnacle and Provident postpetition-interest matters are also scheduled for November 17, according to Dkts. 2083 and 2089.

These matters can affect the proceeds remaining after higher-priority obligations are addressed. The notices do not establish that the requested amounts have been allowed, or how the sealed lender stipulations interact with those requests.

Discovery Developments: Pinnacle Withdraws Examination Request; Committee Hearing Set for November 6

Pinnacle Bank withdrew its emergency request to examine Chief Restructuring Officer M. Benjamin Jones under Bankruptcy Rule 2004. The withdrawal appears at Dkt. 2059. This ends that examination request, but does not establish that Pinnacle withdrew its other claims or objections, or explain the economic terms of its separate lender agreement.

Separately, Dkt. 2050 rescheduled the hearing on the Official Committee of Unsecured Creditors’ third supplemental Rule 2004 request and its request for discovery from the Debtors’ tax and auditing professionals to November 6, 2026, at 2:30 p.m. Eastern.

These proceedings concern efforts to obtain information. The discovery requests are not findings of wrongdoing, and the hearing notice does not establish that the requested discovery has been authorized.

What Investors Should Watch Next

The next meaningful recovery information will come from:

• Confirmed closings and actual proceeds received.
• Publicly available information about lender concessions and approved claim amounts.
• Decisions concerning surcharge requests and disputed liens.
• Allocation of proceeds between DSTs and affiliated operating entities.
• Authorized distributions identifying what beneficial-interest holders will receive.

Current access to the docket in the FINRA-related adversary proceeding, Adv. Proc. No. 26-09006, remains incomplete. The October 23 review could not reliably verify whether additional activity occurred during October 17–22. Accordingly, this update does not confirm that the injunction remained unchanged during that period. Investors should have counsel verify the operative orders before taking action on an affected claim.

For investors evaluating losses, the essential distinction remains between property-sale proceeds, bankruptcy distributions, and potential recoveries through claims against other parties. The severe property-level shortfalls identified above do not determine every potential source of recovery.

About Iorio Law PLLC

Iorio Law PLLC represents investors in securities arbitration disputes involving Delaware Statutory Trusts and other complex alternative investments. If you invested in an Inspired Healthcare Capital DST and would like to discuss how the bankruptcy proceedings, property sales or potential claims involving the recommendation of the investment may affect your rights, you can contact Iorio Law PLLC for a confidential consultation.

This article is for informational purposes only and does not constitute legal, tax or investment advice. Bankruptcy proceedings can change quickly, and information concerning proposed or approved transactions may change before closing. The identification of any brokerage firm or financial professional does not constitute a finding of wrongdoing or liability. Past results do not guarantee future outcomes.

In an October 21, 2026 investor update, Crew Management reported that The Walk entities had consented to the appointment of Farbman Group as receiver. Management expected the appointment on October 22, subject to entry of a court order, and described plans to cooperate with lender BankPlus on a transition and sale process.

The update presents a troubling picture: occupancy of just 57.37%, disrupted rent collections, remediation expenses, a municipal tax enforcement action, and unsuccessful efforts to secure a replacement sponsor or additional financing. Management expressly warns that investors could lose some or all of their invested capital.

These developments form part of Iorio Law’s broader Versity Investments and Crew Enterprises DST sales investigation, which examines sponsor misconduct allegations and whether selling broker-dealers adequately investigated these investments and disclosed material risks.

What Crew Reported About The Walk

According to the investor update, moisture and mold conditions previously resulted in City occupancy restrictions affecting apartments and disrupted scheduled move-ins. Management says remediation work has been completed across the affected apartments, with testing and cleaning performed. Most affected units have been cleared for occupancy, although a limited number still require final City administrative clearance.

Those improvements have not resolved the property’s financial problems. Crew reports that reduced collections, tax obligations, insurance costs, and remediation expenses have left revenues insufficient to meet ongoing needs.

The update also describes disputes over residents’ lease obligations. Book & Ladder disputes certain residents’ assertions that their leases automatically terminated and is pursuing recovery on an individual basis. Those are management’s positions; the letter does not establish the outcome of the lease disputes or how much money will ultimately be collected.

A Replacement Sponsor and Additional Financing Did Not Materialize

Crew previously pursued a transition to an independent sponsor, including a replacement trustee and management team. According to the October 21 update, that transition no longer appears viable.

Management also evaluated funding and restructuring alternatives with outside advisers, but the financing needed to implement them did not become available. Its focus has shifted to selling the property.

For investors, this represents a significant change in the proposed path forward. Efforts to preserve continued ownership have given way to an anticipated receivership and sale, with recovery dependent on the property’s remaining value after debt, other obligations, and process costs.

Tuscaloosa Tax Enforcement Preceded the Receivership Effort

The update identifies the City of Tuscaloosa’s business license tax as another source of financial pressure.

Crew states that management challenged the tax with assistance from a third party and withheld payments while pursuing that challenge. The City subsequently filed an enforcement action seeking unpaid business license taxes and an injunction against property operations.

According to Crew, BankPlus became actively involved after that action and later pursued appointment of a receiver. The Walk entities have now consented to Farbman Group’s appointment.

The letter describes the Alabama proceeding as separate from a Delaware petition discussed in an earlier investor notice. It also reports that a Delaware hearing previously scheduled for November 5, 2026, was taken off calendar. The update does not state that the Delaware petition has been dismissed or finally resolved.

A Potential Sale Does Not Establish Investor Recovery

Crew reports that buyer outreach has produced a written offer and additional expressions of interest. The update does not disclose the offer price or establish that a binding sale agreement has been executed.

A written offer alone does not show whether a sale will close or whether proceeds will be sufficient to return any investor capital. Crew acknowledges that recovery will depend on the ultimate sale price, outstanding debt and other obligations, and the costs of the process.

The October 21 letter also does not confirm entry of the receivership order. Until that order is available, the anticipated appointment should not be described as a completed court action.

Following Hayworth Tanglewood DST

The Walk’s anticipated receivership follows the appointment of a receiver for Hayworth Tanglewood’s Houston property on August 31, 2026. Iorio Law’s Hayworth Tanglewood DST foreclosure and receivership update discusses that proceeding and its implications for investors.

The developments involve separate properties and proceedings. Each investment requires its own review of offering documents, financial records, management decisions, and sales practices.

Iorio Law is also monitoring Vintage DST, One on 4th DST, and Apex South Creek DST. Their inclusion in the firm’s monitoring does not mean that they are in receivership or face the same circumstances as The Walk.

Allegations That Sponsor Principals Misappropriated Investor Proceeds

The financial problems must also be considered alongside allegations concerning the use of DST investor funds.

In KHCA Funding LLC and Knights Hill Ireland II DAC v. Versity Invest, LLC, et al., Index No. 651885/2024, the lender-side plaintiffs alleged that Versity-related entities and principals Blake Wettengel, Tanya Muro, and Brian Nelson diverted more than $56 million in DST syndication proceeds that should have repaid the lender. The allegations concern proceeds from Hayworth, Vintage, The Walk, and One on 4th, including alleged use for unrelated real estate transactions and personal purposes.

On April 10, 2026, the court allowed key contract claims to proceed, including claims based on alleged alter-ego liability. That pleading-stage ruling did not establish that the alleged diversions occurred or absolve the defendants of the underlying allegations. See Court Allows Key Claims Against Versity/Crew, Wettengel, Muro, and Nelson to Proceed.

Earlier Allegations That Principals Defrauded Investors Were Due-Diligence Red Flags

The concerns extend beyond the 2024 lender litigation.

As discussed in Iorio Law’s earlier Hayworth Tanglewood investigation update, public lawsuits filed in November 2020 and June 2021 alleged similar misconduct involving Wettengel and Muro. Those allegations included defrauding investors by diverting syndicated funds away from the properties for which they were raised and using the money for undisclosed or improper purposes.

Those allegations are not presented as adjudicated findings. Their significance for selling broker-dealers is that litigation accusing sponsor principals of misusing investor money can be a material warning sign requiring investigation before recommending another offering managed by those principals.

Iorio Law is investigating whether selling firms discovered and evaluated that history, sought supporting records and explanations, and disclosed material allegations and related risks to investors. The relevant inquiry includes what information was available when each recommendation was made.

What Selling Broker-Dealers Should Have Investigated and Disclosed

FINRA’s Regulatory Notice 23-08 identifies issuer and management litigation history, affiliate transactions involving offering proceeds, and material developments during an offering as relevant areas of private-placement due diligence. It also explains that firms should independently verify material representations and investigate red flags rather than rely solely on the issuer’s assurances.

Applied to these offerings, the investigation should address:

• Prior investor-fraud allegations. What did public litigation reveal about the principals’ handling of investor money, and how did the firm evaluate and communicate material risks?
• Control over investor funds. Who controlled syndication accounts, property accounts, and transfers to affiliated entities? What safeguards existed against unauthorized use?
• Use of offering proceeds. Were funds used consistently with offering disclosures and financing obligations? Did the firm obtain evidence supporting the sponsor’s representations?
• Affiliated management and conflicts. Did common ownership of the sponsor, trustee, property manager, and other entities create incentives or opportunities to move funds away from investors’ properties?
• Financial condition and new developments. For recommendations made after adverse information became available, did firms update their review to address litigation, payment problems, or other material changes?
• Investor-specific risks. Were the investment’s illiquidity, expenses, financing risks, and potential loss of principal consistent with the customer’s financial needs and objectives?

For covered retail recommendations, Regulation Best Interest requires broker-dealers to consider an investment’s risks, rewards, and costs in light of the customer’s investment profile.

A lawsuit alone does not prove misconduct or automatically prohibit a recommendation. But material allegations that sponsor principals previously defrauded investors cannot be dismissed simply because they remain disputed. Selling firms must reasonably investigate relevant warning signs and provide disclosures sufficient to avoid misleading investors about material risks.

Later financial distress does not, by itself, establish a sales-practice violation. The central question is whether the brokerage firm fulfilled its obligations based on what it knew or reasonably should have discovered at the time.

Preserve Your Investment Records

Investors should preserve offering materials, subscription documents, account statements, distribution records, sponsor updates, and communications with the financial professional who recommended the investment.

Those records can help establish what was represented about income, principal risk, liquidity, sponsor history, and due diligence, and whether material information was omitted.

Contact Iorio Law About Your Crew DST Investment

Iorio Law PLLC represents investors nationwide in securities disputes involving DSTs, private placements, and other alternative investments.

Visit our primary DST investigation page for additional information about the firm’s investigation of Versity Investments, Crew Enterprises, and the brokerage firms that recommended their offerings.

If you invested in The Walk DST, Hayworth Tanglewood DST, Vintage DST, One on 4th DST, or Apex South Creek DST, contact Iorio Law to discuss your investment and potential legal options.

Call (646) 330-4624 or email info@iorio.law for a free case evaluation.

Hayworth Tanglewood DST has entered a substantially more serious stage of financial distress.

The senior mortgage lender has filed a judicial foreclosure action in Harris County, Texas, alleging payment defaults on a $48 million loan. On August 31, 2026, the court appointed a receiver to take control of the 246-unit Houston apartment property. The property is now being operated by Tarantino Properties rather than Crew Enterprises and its affiliated property manager.

The receivership is an important development for Hayworth Tanglewood DST investors. It confirms that control of the property has been removed from the sponsor, although it does not mean that a foreclosure sale has already occurred or that investors’ losses have been finally determined.

Iorio Law PLLC continues to investigate the sale of Hayworth Tanglewood DST and other Delaware Statutory Trust investments sponsored by Versity Investments and Crew Enterprises. Investors may have claims against the broker-dealers and financial professionals that recommended these investments.

Read our January 2026 Hayworth Tanglewood DST investigation and our broader Versity and Crew Enterprises DST investigation.

Key Hayworth Tanglewood DST Developments

The principal developments as of October 2026 include:

• The senior lender filed a judicial foreclosure action in Harris County, Texas.
• The lender alleges that the borrowers failed to make the required April 1, 2026 payment and continued to make only partial or insufficient payments.
• The lender accelerated the loan on July 31, 2026.
• The lender alleged that at least $47.28 million was due as of August 3, 2026, before additional interest, legal fees, receivership costs, and other charges.
• On August 31, 2026, the court appointed Sal Thomas as receiver.
• The Hayworth entities were divested of authority to operate and manage the property without the receiver’s approval.
• Tarantino Properties has assumed property-management responsibilities.
• Hayworth Tanglewood DST and Hayworth Tanglewood LeaseCo filed an Answer containing a general denial and specifically denying that they committed any act creating recourse or springing-recourse liability.
• A separate Delaware lawsuit concerning ownership of the DST and entitlement to eventual sale proceeds remains unresolved.

These developments do not establish the amount of any investor’s ultimate loss. They do, however, confirm that Hayworth Tanglewood DST is experiencing significant financial and operational distress.

Hayworth Tanglewood DST Offering Background

Hayworth Tanglewood DST was formed to acquire The Hayworth, a Class A multifamily apartment community located at 1414 Wood Hollow Drive in Houston, Texas.

According to the offering documents:

• Property: The Hayworth Apartments
• Location: Houston, Texas
• Units: 246
• Acquisition date: June 30, 2022
• Purchase price: $105.5 million
• Senior mortgage loan: $48 million
• Equity offering: Approximately $76.77 million
• Total offering price: Approximately $124.77 million
• Sponsor: Versity Invest, LLC, later renamed Crew Enterprises, LLC
• Managing broker-dealer: WealthForge Securities, LLC

The DST was marketed to investors seeking passive real-estate ownership and potential tax deferral through a Section 1031 exchange.

Investors, however, had little control over the property and depended on the sponsor, master tenant, property manager, trustee, and selling broker-dealers to protect their interests.

Senior Lender Files Judicial Foreclosure Action

The foreclosure and receivership case is pending in the 80th Judicial District Court of Harris County, Texas, under Cause No. 2026-55328. Public case information is available through the Harris County District Clerk.

According to the lender’s First Amended Petition, the $48 million loan was originated on June 30, 2022. The lender alleges that:

• The borrowers failed to make the payment due April 1, 2026;
• Subsequent payments were incomplete or insufficient;
• Additional defaults arose from substantial unsatisfied judgments against Versity/Crew-related parties;
• The property suffered from declining revenue and serious maintenance problems; and
• The lender accelerated the entire loan on July 31, 2026.

The lender seeks judicial foreclosure of the real and personal property, damages for breach of the loan agreement, attorneys’ fees, and enforcement of guaranty obligations against Blake Wettengel and Tanya Muro.

Court Appoints Receiver and Removes Sponsor Control

On August 31, 2026, the Texas court appointed Sal Thomas as receiver for The Hayworth.

The receivership order gives the receiver broad authority over the property, including authority to:

• Take exclusive possession and control of the property;
• Collect and control rents and other operating revenue;
• Control property bank accounts, books, records, leases, contracts, and tenant information;
• Hire or terminate property managers, employees, vendors, attorneys, consultants, and brokers;
• Make repairs and capital improvements;
• Establish operating and capital budgets;
• Investigate the property’s financial, structural, environmental, and operational condition;
• Prosecute or defend claims belonging to the property; and
• Market the property and negotiate a proposed purchase agreement.

The order expressly divests the Hayworth entities and their agents of authority to operate or manage the property without the receiver’s approval.

An actual sale still requires court approval. The receiver also cannot borrow against receivership assets or issue receiver certificates without an additional court order.

The court designated Tarantino Properties as property manager. The property’s current website now states that The Hayworth is under new management and exclusively managed by Tarantino Properties, Inc.

This confirms that the receivership has become operational, not merely procedural, and that Crew and its affiliated property manager no longer control day-to-day property operations.

Why the Receivership Matters to Hayworth DST Investors

A receivership is generally intended to preserve and protect property while litigation proceeds. Independent management may improve financial reporting, leasing, maintenance, security, and preservation of records.

The receivership may also impose additional costs. Receiver fees, property-management fees, repairs, professional expenses, taxes, and other court-authorized expenses may be paid from property revenue and may reduce the value remaining for equity investors.

The receiver’s authority to investigate and control the property’s financial records could prove especially important. Those records may reveal:

• How rents and reserves were used;
• Whether property funds were transferred to affiliates;
• The extent of unpaid vendor and repair obligations;
• The property’s current occupancy and operating performance;
• The cost of correcting deferred maintenance;
• The amount of default interest and lender charges;
• The property’s current market value; and
• Whether a sale, refinancing, or restructuring offers the best available recovery.

The Property Has Not Yet Been Sold Through Foreclosure

Appointment of a receiver is not the same as a completed foreclosure.

The receiver may operate and market the property, but a sale requires court approval. The receivership order does not itself determine:

• The final amount owed to the senior lender;
• The property’s current value;
• Whether the property will be sold, refinanced, or restructured;
• Whether the lender will recover the entire loan balance;
• The amount, if any, remaining for DST investors; or
• The amount of each investor’s loss.

Investors should therefore be cautious about assuming either that the investment is already a total loss or that the property can be stabilized without a significant impairment of principal.

Hayworth Entities File a Limited Answer

On September 21, 2026, Hayworth Tanglewood DST and Hayworth Tanglewood LeaseCo filed an Answer to the lender’s First Amended Petition.

The Answer contains a general denial and specifically denies that the entities committed any act or omission creating recourse or springing-recourse liability under the loan documents.

The Answer does not vacate or modify the receivership. It also does not constitute an admission of the lender’s other allegations. Under Texas procedure, a general denial ordinarily places non-verified allegations in dispute.

The filing appears to focus particular attention on whether liability extends beyond the mortgaged property. That issue may become important if a foreclosure or court-approved sale produces less than the amount owed to the senior lender.

Separate Delaware Lawsuit Creates Additional Uncertainty

Hayworth is also the subject of a separate ownership dispute in the Delaware Court of Chancery: Hayworth Tanglewood IB, LLC v. Hayworth Tanglewood DST, et al., C.A. No. 2025-0748-SEM.

The plaintiff in that case was the DST’s initial beneficiary and contributed more than $58 million toward the property’s acquisition. It alleges that, as interests were sold to outside investors, the defendants failed to use all required offering proceeds to redeem a corresponding portion of the initial beneficiary’s interest.

The plaintiff claims that it continues to own at least 60% of the DST and seeks, among other relief, a constructive trust and restrictions on the distribution of future sale proceeds.

On January 15, 2026, the Delaware Court of Chancery denied the defendants’ motion to dismiss or stay the action. The court allowed the claims to proceed but did not determine the correct ownership percentages or decide who is entitled to eventual disposition proceeds.

The Texas receivership does not resolve the Delaware ownership dispute. If the property is ultimately sold, the dispute over ownership and sale proceeds may become increasingly important.

Public Records Raise Questions About the Use of Hayworth Syndication Proceeds

Separate litigation pending in New York alleges that Versity, Wettengel, and Muro diverted syndication proceeds from Hayworth and other DST offerings to finance unrelated projects.

Publicly filed bank statements show that on November 17, 2022, $5 million was transferred from a Hayworth Tanglewood DST syndication account to another Versity-controlled account. The next day, that account wired $8.6 million to a title company in connection with the acquisition of Apex South Creek, an unrelated Florida property. The records were filed in KHCA Funding LLC, et al. v. Versity Invest, LLC, et al., Index No. 651885/2024.

The New York plaintiffs allege that Hayworth and other DST syndication proceeds were improperly used to finance the Apex acquisition after the bridge lender declined to fund that transaction.

Those allegations remain contested and have not been finally adjudicated. The banking records nevertheless raise substantial questions about whether Hayworth offering proceeds were used consistently with the representations made to investors and lenders.

They also raise an important due-diligence question: What did the managing broker-dealer and participating selling firms know, or what should they have discovered, about Versity’s financial controls, affiliated transactions, litigation history, and use of syndication proceeds?

Broker Dealers That Sold Hayworth Tanglewood DST

Based on information reviewed by Iorio Law, broker-dealers that sold or participated in the distribution of Hayworth Tanglewood DST include:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC, now Realta Equities, Inc.
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• WestPark Capital, Inc.

WealthForge Securities served as the exclusive managing broker-dealer for the offering.

Selling commissions, dealer-management fees, broker-dealer allowances, and other offering expenses created substantial financial incentives to recommend the investment. Those incentives did not eliminate the firms’ obligations to investigate the offering, understand its risks, make fair and balanced disclosures, and determine whether the investment was in the customer’s best interest.

Potential Claims by Hayworth Tanglewood DST Investors

Depending on the investor’s circumstances and the representations made at the time of sale, potential claims may include:

• Failure to conduct reasonable due diligence;
• Violation of Regulation Best Interest;
• Unsuitable or inappropriate investment recommendations;
• Material misrepresentations and omissions;
• Failure to disclose sponsor-level litigation and misconduct allegations;
• Failure to disclose conflicts of interest;
• Negligence;
• Breach of fiduciary duty;
• Failure to supervise; and
• Overconcentration in illiquid alternative investments.

These claims are generally separate from the foreclosure and receivership proceedings. Investors may be able to pursue recovery from the broker-dealer that recommended the DST through FINRA arbitration even if the property remains in receivership or is eventually sold at a loss.

The receivership order does not release or transfer an investor’s direct claims against a brokerage firm or financial professional.

What Hayworth Tanglewood Investors Should Do

Investors should preserve:

• The private placement memorandum;
• Subscription and purchase documents;
• Account statements;
• Distribution records;
• Sponsor updates and investor letters;
• Emails and text messages with the financial advisor;
• Risk-tolerance and investment-profile documents;
• 1031 exchange documents;
• Marketing materials and presentations; and
• Notes concerning representations about income, safety, liquidity, property value, or sponsor due diligence.

Legal time limits may apply, and those limits do not necessarily wait for the foreclosure, receivership, or related litigation to conclude.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide in claims involving Delaware Statutory Trusts, private placements, alternative investments, and broker-dealer misconduct.

The firm is investigating the sale of Hayworth Tanglewood DST and other investments sponsored by Versity Investments and Crew Enterprises.

If you invested in Hayworth Tanglewood DST and would like to discuss your legal options:

Call: (646) 330-4624

Email: info@iorio.law

Free case evaluation: Contact Iorio Law PLLC

No recovery, no fee. Prior results do not guarantee a similar outcome.

By August M. Iorio | Iorio Law PLLC

This week’s Iorio Law Distressed Securities Monitor highlights an important distinction for investors in alternative investments: restricted liquidity is not necessarily the same thing as financial impairment—but sometimes the two occur together.

Our latest research identified a significant existing impairment involving Ashford Hospitality Trust’s non-traded Series J, K, L, and M preferred stock. Ashford suspended shareholder redemptions in December 2025 and preferred dividends in January 2026. By June 30, 2026, approximately $9.2 million of dividends on the four non-traded preferred series had accumulated but remained unpaid. Ashford has also reported substantial doubt about its ability to continue as a going concern.

At VineBrook Homes Trust, meanwhile, the company has now reported final results from its October tender offer. Shareholders attempted to tender more than three times the number of shares VineBrook agreed to purchase, even though the tender price was approximately 37% below the company’s June stated net asset value.

The private-credit market presents a more nuanced picture. Several major non-traded private-credit funds continue to receive withdrawal requests substantially exceeding their quarterly repurchase limits. But high redemption demand alone does not establish that those funds are insolvent or that their underlying loan portfolios have suffered equivalent losses.

Finally, the Easterly ROCMuni High Income Municipal Bond Fund provides a useful contrast. The fund suffered losses of approximately 68% during 2025 and is now being liquidated. Its experience demonstrates what can happen when liquidity pressure coincides with severe deterioration in the underlying investment portfolio.

This Monitor examines what those developments mean—and what investors should watch next.

This Week’s Distressed Securities Monitor

Ashford Hospitality Trust Preferred Stock: Dividends and Redemptions Are Both Suspended

One of the most significant securities identified in our latest research is Ashford Hospitality Trust’s non-traded preferred-stock program.

The securities include:

• Series J Redeemable Preferred Stock;
• Series K Redeemable Preferred Stock;
• Series L Redeemable Preferred Stock; and
• Series M Redeemable Preferred Stock.

These securities are separate from Ashford Hospitality Trust’s publicly traded preferred shares.

Ashford marketed the non-traded preferred stock primarily as income-producing preferred securities with a stated value of $25 per share.

The current situation is materially different from a private-credit fund merely limiting quarterly redemptions.

Ashford Suspended All Redemptions in December 2025

On December 9, 2025, Ashford’s board suspended all redemptions of its Series J, K, L, and M preferred stock.

Ashford also terminated the primary offering of its Series L and M preferred stock.

Its SEC filing warned investors that because there is no public trading market for the preferred shares, issuer redemptions were likely to be the principal means of obtaining liquidity. With those redemptions suspended, Ashford warned that shareholders should not expect to have their shares redeemed for an indefinite period, if at all.

Source: SEC filing regarding preferred-stock redemption suspension

That is a significant liquidity impairment.

Unlike a quarterly repurchase program that was always limited to 5% of outstanding shares, these preferred securities generally provided holders with contractual redemption rights, subject to applicable terms and redemption fees. Those rights are presently unavailable because Ashford suspended redemptions.

Ashford Then Suspended Preferred Dividends

The situation deteriorated further in January.

On January 13, 2026, Ashford announced that it had suspended preferred dividends, including dividends that had already been declared for shareholders of record as of December 31, 2025 and were scheduled to be paid January 15.

Source: Ashford preferred-dividend suspension announcement

Ashford stated that it took the action to preserve liquidity while evaluating strategic alternatives.

The company has said unpaid cumulative dividends will continue to accrue under the governing terms of the preferred securities.

By June 30, 2026, Ashford reported accumulated but unpaid dividends of approximately:

• $7.685 million for Series J;
• $762,000 for Series K;
• $223,000 for Series L; and
• $530,000 for Series M.

Together, that is approximately $9.2 million of accumulated unpaid dividends on the four non-traded preferred series.

Source: Ashford June 30, 2026 Form 10-Q

That is an actual payment impairment—not merely investors asking to withdraw more money than a fund’s repurchase program permits.

More Than $226 Million of Non-Traded Preferred Redemption Value Was Reported

Ashford’s June financial statements reported redemption values of approximately:

• $187.5 million for Series J;
• $19.0 million for Series K;
• $5.7 million for Series L; and
• $14.1 million for Series M.

That represents more than $226 million of reported redemption value across the four non-traded preferred series.

The amount should not be characterized as an investor loss. Ashford has not entered bankruptcy, and the ultimate value investors will receive for their preferred shares remains unknown.

Indeed, in March 2026, valuation firm Robert A. Stanger & Co. provided an estimated liquidation value of $25 per share as of December 31, 2025, equal to the preferred stock’s liquidation preference. Ashford cautioned, however, that the estimate was unaudited, was not a determination of fair market value, did not represent the price at which the shares could actually trade, and did not reflect events occurring after December 31.

Source: Ashford estimated liquidation value disclosure

The important verified facts today are more limited: shareholders cannot redeem their shares through Ashford, cash dividends have been suspended, and unpaid cumulative dividends continue to accumulate.

Ashford Has Also Issued a Going-Concern Warning

Ashford’s broader financial condition increases the importance of those developments.

As of June 30, the company reported $75 million of cash and cash equivalents and approximately $945.2 million of nonrecourse loans maturing within the following year.

Ashford stated that it may not have sufficient cash to support daily operations over that period because of debt-service requirements, debt maturities, and other potential obligations. Management concluded that there was substantial doubt about the company’s ability to continue as a going concern.

Ashford also reported that 30 hotels were subject to lender cash traps at June 30, meaning certain property cash flows were being swept into lender-controlled accounts.

Source: Ashford June 30, 2026 Form 10-Q

A going-concern warning does not mean Ashford will file bankruptcy or that preferred shareholders will lose their principal. It does mean the company itself has identified substantial uncertainty about its financial condition.

Who Sold Ashford’s Non-Traded Preferred Stock?

This question is particularly important for individual investors.

Ashford Securities LLC served as dealer manager for the non-traded preferred offerings.

For the Series J and K offering, Ashford Securities reported in December 2024 that it had raised more than $180 million through a network of 52 broker-dealers and registered investment advisers since the offering launched in May 2022.

Source: Ashford Securities distribution disclosure

SEC-filed agreements for the later Series L and M offerings also show that Ashford Securities used participating broker-dealers to sell shares. The agreements contemplated selling commissions based on the amount of preferred stock sold by each participating firm.

Source: Series L/M participating broker-dealer agreement

The identities and sales volumes of the participating brokerage firms are now an important subject of investigation.

Iorio Law is investigating which broker-dealers and financial professionals recommended Ashford Hospitality Trust’s Series J, K, L, and M preferred stock to individual investors, and what investors were told about liquidity, redemption rights, the issuer’s leverage, and the risks to the preferred distributions.

Inclusion of Ashford or any brokerage firm in this investigation does not constitute a finding that anyone violated the securities laws or other legal obligations.

VineBrook Homes Trust: Final Tender Results Confirm Significant Unmet Demand for Liquidity

VineBrook Homes Trust has now announced the final results of the discounted tender offer discussed in our recent VineBrook investigation.

The tender expired on October 5.

According to VineBrook’s final SEC filing:

• shareholders tendered approximately 2,753,350 shares;
• VineBrook purchased 909,090 shares;
• the company paid $33 per share;
• approximately $30 million of shares were purchased; and
• the final proration factor was 33.02%.

Source: VineBrook final tender results

In other words, VineBrook purchased only about one-third of the shares participating shareholders attempted to sell.

Roughly two-thirds of the tendered shares remained invested.

Shareholders Sought Liquidity at a 37.4% Discount to Stated NAV

The tender price is also noteworthy.

VineBrook reported a June 30 stated NAV of $52.68 per share. The $33 tender price was approximately 37.4% below that figure.

Despite that discount, shareholders sought to tender more than three times the shares VineBrook offered to purchase.

That does not establish that VineBrook shares are worth $33 or that every investor has suffered a 37.4% loss. A limited issuer tender is not necessarily equivalent to fair market value, and individual investors have different purchase prices and distribution histories.

But the tender provides an important liquidity signal: a substantial number of shareholders were willing to seek an exit at a material discount to VineBrook’s stated valuation, and most of the shares they sought to sell remained unredeemed.

That evidence is particularly relevant because ordinary VineBrook share repurchases have generally been suspended since December 2022.

Iorio Law’s separate VineBrook Homes Trust investigation discusses the REIT’s liquidity history and the SEC filings establishing that Raymond James & Associates acted as a placement agent under selling agreements. Read the VineBrook Homes Trust investigation

We will continue monitoring what happens to VineBrook’s stated NAV, future liquidity initiatives, financing obligations, and the brokerage firms that sold its shares.

Private Credit: Redemption Pressure Is Important—but It Is Not Automatically Investment Failure

One of the most important issues we are tracking involves large non-traded private-credit funds.

Several have experienced quarterly repurchase requests significantly above the amount they ordinarily offer to repurchase.

The numbers can sound alarming:

BCRED reported approximately $4.3 billion of Q3 requests, representing roughly 10% of shares, and will repurchase 5%. North Haven reported requests equal to approximately 11.4% of units and expects to satisfy about 43.8% of each investor’s request. HPS reported requests of approximately 11.5%, down from 13.3% in Q2. OCIC reported requests of approximately 16.8%, down from 21.9% in Q1.

Source: BCRED Q3 tender materials

OTIC remains the outlier. Its latest shareholder update reports tender demand near 39% of outstanding shares, following similarly elevated demand during the first two quarters of 2026.

Source: OTIC shareholder update

Those figures deserve scrutiny.

But they should not be interpreted as meaning investors have lost 50%, 70%, or 90% of their principal simply because only part of a redemption request was honored.

What a Repurchase Limit Actually Means

These funds invest primarily in private loans and other assets that generally cannot be liquidated instantly.

Their structures therefore offer limited periodic liquidity rather than unlimited redemption rights.

If a fund offers to repurchase 5% of outstanding shares in a quarter and shareholders attempt to redeem 15%, requests will generally be prorated.

That is a liquidity problem for an investor who needs access to capital.

It is not automatically evidence that the fund cannot meet its debts or that its portfolio has lost a corresponding percentage of its value.

What We Look for Before Calling a Security Financially Impaired

The Distressed Securities Monitor therefore looks beyond tender percentages.

Among the additional indicators we monitor are:

• sustained or accelerating declines in NAV;
• realized credit losses;
• material unrealized portfolio markdowns;
• rising non-accrual loans;
• missed borrower payments;
• distribution reductions or suspensions;
• increasing leverage;
• emergency or rescue financing;
• covenant defaults;
• inability to refinance debt; and
• signs that available liquidity may be insufficient to meet operating or financing obligations.

Those factors help distinguish investor demand for liquidity from deterioration in the investment itself.

Current Private-Credit Data Provide Important Counterweights

BCRED, for example, reported more than $17 billion of available liquidity, consisting of cash and undrawn borrowing capacity, when it disclosed its Q3 tender demand. Blackstone also reported leverage of approximately 0.8 times debt to equity.

Source: BCRED shareholder update

HPS reported that Class I investors had earned a 9.9% annualized total net return since inception through July 31, 2026, even as redemption requests remained above the quarterly limit.

Source: HLEND Q3 tender shareholder letter

OCIC reported that Q3 tender demand had declined for a third consecutive quarter—from 21.9% in Q1 to 18.8% in Q2 and 16.8% in Q3.

Source: OCIC shareholder update

OTIC reported only approximately 0.3% of its portfolio at fair value on non-accrual status as of June 30, despite extremely high shareholder tender demand. Blue Owl attributed much of the investor concern to worries surrounding technology and artificial intelligence rather than broad borrower defaults.

Source: OTIC portfolio update

Those facts do not eliminate the liquidity concerns.

They do explain why Iorio Law does not presently characterize those funds as having suffered losses equal to their unfulfilled redemption requests.

Why Private-Credit Liquidity Still Matters to Brokerage Customers

Even when the investment itself remains financially sound, restricted liquidity can still matter greatly to an individual investor.

A financial advisor may have recommended a private-credit fund to a retiree who expected periodic access to principal, to an investor funding foreseeable expenses, or as an alternative to more liquid fixed-income investments.

Whether that recommendation was appropriate depends on the investor’s circumstances and what was disclosed at the time—not simply on whether the fund later performed positively.

Several of the private-credit products we are monitoring also have significant wealth-management distribution.

SEC materials establish investor or adviser channels involving firms such as Morgan Stanley, Merrill Lynch, Raymond James, LPL Financial, Edward Jones, UBS, and others, depending on the particular fund.

Our investigation therefore focuses not merely on whether a quarterly tender was prorated, but also on how the investment’s liquidity limitations were explained and whether the recommendation fit the customer’s actual liquidity needs and investment profile.

A later liquidity restriction alone does not establish that a broker or advisor made an improper recommendation.

Easterly ROCMuni: A Very Different Type of Impairment

The Easterly ROCMuni High Income Municipal Bond Fund illustrates why distinguishing liquidity pressure from actual investment deterioration matters.

Unlike the large private-credit funds discussed above, Easterly ROCMuni suffered catastrophic investment losses.

For the year ended December 31, 2025, the Fund reported returns before taxes of:

• negative 68.47% for Class A shares (RMJAX);
• negative 67.82% for Investor Class shares (RMHVX); and
• negative 67.70% for Class I shares (RMHIX).

By comparison, the Bloomberg Municipal Bond Index returned a positive 4.25% during the same year.

Source: Easterly ROCMuni 2025 performance filing

The Fund’s own shareholder reporting attributed its deterioration in part to high redemptions and liquidity-driven dispersion.

Source: Easterly Funds shareholder report

The result was not merely a temporary redemption gate.

The Fund’s board approved a Plan of Liquidation and Dissolution, and the fund is now closed to new investors and winding up its affairs.

Source: Easterly ROCMuni liquidation supplement

The Liquidation Remains Complicated by Illiquid Assets and Litigation

The March 2026 liquidation supplement states that Easterly was seeking to convert remaining assets into cash or cash equivalents and distribute available proceeds to shareholders.

But the Fund still held illiquid investments, and Easterly stated that it could not predict how long disposition of those assets would take.

The Fund was also facing contingent liabilities associated with pending litigation. As a result, Easterly said it could not predict when the Fund would be able to begin or complete liquidating distributions to shareholders.

Source: Easterly ROCMuni liquidation supplement

This is a fundamentally different situation from a private-credit fund that continues operating with a relatively stable NAV while honoring a contractual 5% quarterly repurchase program.

Easterly ROCMuni involves substantial realized investment deterioration and an actual liquidation process.

Brokerage Distribution Remains Part of the Easterly Investigation

Easterly Securities LLC is the Fund’s distributor. Its SEC prospectus also states that the distributor and adviser could compensate financial intermediaries that sold shares or provided shareholder services. For fiscal 2025, the Fund reported Rule 12b-1 payments to dealers for both Class A and Investor Class shares.

Source: Easterly ROCMuni prospectus

Iorio Law began investigating recommendations of Easterly ROCMuni in 2025, including recommendations involving Osaic and Janney Montgomery Scott.

Our earlier report discusses the investment’s collapse and the issues we are investigating concerning brokerage recommendations: Lost Money in the Easterly ROCMuni Fund? Iorio Law Investigates Osaic and Janney Montgomery Scott

Those investigations concern allegations and factual questions about individual recommendations. Inclusion of a brokerage firm in an investigation does not constitute a finding of misconduct or liability.

The Key Distinction for Investors: Illiquidity, Impairment, and Failure Are Not the Same Thing

The developments covered this week fall at different points on the distress spectrum.

Ashford Hospitality Trust’s non-traded preferred stock currently involves suspended redemptions and suspended cash dividends, accumulated unpaid preferred dividends, and a going-concern warning.

VineBrook Homes Trust has not entered bankruptcy and continues operating, but investors demonstrated substantial demand for liquidity through a tender priced significantly below stated NAV—and only approximately one-third of tendered shares were purchased.

Private-credit funds such as BCRED, North Haven, HPS, OCIC, and OTIC are experiencing significant redemption pressure, but current evidence does not support treating an unfulfilled tender request as an equivalent investment loss.

Easterly ROCMuni experienced substantial underlying investment losses and is now liquidating.

Those distinctions matter both financially and legally.

An investment does not need to become worthless before an investor experiences meaningful harm. Loss of income, inability to access principal, substantial valuation reductions, or forced acceptance of discounted liquidity can all be important.

But the facts should be described accurately.

The purpose of the Iorio Law Distressed Securities Monitor is to identify these developments as they emerge—without assuming that every liquidity event will become a failure or that every investment loss resulted from brokerage misconduct.

What Iorio Law Is Monitoring Next

Following this week’s research, several questions warrant particular attention:

• Ashford Hospitality Trust: Which 52 broker-dealers and RIAs participated in the Series J and K preferred-stock distribution? Which firms sold the later Series L and M offerings? How much did each firm sell? When might preferred dividends or redemptions resume, and how will Ashford address approximately $945 million of near-term property debt?
• VineBrook Homes Trust: What happens to the roughly two-thirds of tendered shares that were not purchased? Will VineBrook provide additional liquidity? How will future stated NAVs compare with the $33 tender price?
• Private credit: Do repurchase requests continue moderating, or do investors repeatedly re-tender? More importantly, do NAVs, non-accruals, realized losses, leverage, or distributions begin showing material deterioration alongside the liquidity pressure?
• Easterly ROCMuni: What recoveries will ultimately be available as remaining illiquid assets are sold and contingent liabilities are addressed?

These are the kinds of developments the Distressed Securities Monitor will continue tracking each week.

About the Iorio Law Distressed Securities Monitor

The Iorio Law Distressed Securities Monitor tracks failed, impaired, illiquid, defaulted, and financially stressed investments sold to individual investors through brokerage firms and financial professionals.

Our research focuses on the investment itself and the distribution network through which it reached investors.

The Monitor does not assume that a broker-dealer or financial professional is legally responsible simply because an investment later declined, restricted redemptions, or failed. Any potential claim depends on the facts surrounding the recommendation, the investor’s circumstances, the disclosures made, the applicable legal and regulatory standards, and other evidence.

Iorio Law PLLC represents investors nationwide in disputes involving brokerage firms and financial professionals.

Investors who purchased Ashford Hospitality Trust preferred stock, VineBrook Homes Trust, Easterly ROCMuni, private-credit funds, or other impaired alternative investments through a financial advisor may contact Iorio Law PLLC at (646) 330-4624 for a free consultation.

October 12, 2026 | Week Ending October 10, 2026
By August M. Iorio | Iorio Law PLLC

The approval of Inspired Healthcare Capital’s property sales answered an important question: whether the transactions could move forward. A new bankruptcy filing addresses a different—and more consequential—question for Delaware statutory trust investors: How much money could remain after debt, expenses and competing claims are addressed?

On October 9, 2026, IHC and its affiliated debtors filed a motion seeking to charge certain operating and sale-related expenses against secured lenders’ collateral. The filing provides financial details concerning four communities: Fort Myers, Delray Beach, Melbourne and Grapevine. Those figures show why a property’s sale price cannot be treated as the amount available to its DST investors.

Fort Myers is particularly concerning. The motion lists a $13.2 million sale price, a lender-asserted payoff of approximately $12.61 million, and nearly $1.5 million in identified expenses. On the debtors’ calculation, the sale price is insufficient to cover both the lender’s full asserted payoff and all those expenses. That does not establish investors’ final recoveries, but it puts concrete numbers behind the concerns discussed in our first IHC Bankruptcy Monitor update.

Fort Myers: What the $13.2 Million Sale Price Actually Shows

The motion provides the following calculation for Inspired Senior Living of Fort Myers DST:

The distinction is significant. Subtracting Stride’s asserted payoff from the sale price produces approximately $590,000. But that is not $590,000 earmarked for investors. It is a preliminary difference before accounting for the expenses identified in the motion and before resolving how the sale proceeds should be allocated.

Although the debtors’ table labels that difference “Equity,” the table itself shows that the listed expenses exceed it. The filing therefore should not be read as a distribution statement for Fort Myers beneficial-interest holders.

The debtors seek permission to recover $902,838 from the lender’s collateral through a bankruptcy mechanism called a surcharge. That amount is not an additional expense on top of the $1,493,277. It is the portion of the listed expenses that exceeds the $590,439 difference between the sale price and the asserted payoff.

For Fort Myers investors, the filing raises serious concerns about whether the property sale will leave a meaningful amount available for their interests. But the correct conclusion remains narrower than a declaration of total loss: the debtors’ figures show insufficient proceeds to pay the full asserted mortgage payoff and all identified expenses; they do not establish a final investor recovery from the bankruptcy or from every potential source.

The distinction matters because the motion reserves challenges to lender payoff amounts, and its proposed order does not determine the allocation of proceeds between the DST and its affiliated master tenant.

Delray Beach, Melbourne and Grapevine: Three Different Financial Pictures

The October 9th motion also discloses sale prices, asserted lender payoffs and expenses for three other communities.

Amounts are rounded. The Delray Beach and Grapevine payoffs are calculated through November 1, 2026; Melbourne’s is stated as of September 16, 2026. The debtors reserve rights concerning the lender-asserted amounts. Source: Dkt. 1920, pages 7, 14 and 15.

Delray Beach: The Asserted Loan Payoff Exceeds the Sale Price

For Delray Beach, the motion lists a $26.1 million sale price and an asserted lender payoff of approximately $28.9 million. The difference is approximately $2.8 million below the asserted payoff before the identified expenses are considered.

The debtors also identify approximately $2.06 million in expenses and seek to surcharge the lender’s collateral for that amount. These figures raise substantial concerns about a residual recovery from the property sale, while leaving the disputed claims, liens and allocation issues to be resolved.

Melbourne: A Larger Gap Between the Sale Price and Claimed Debt

Melbourne’s $10 million sale price is approximately $6.25 million below the stated lender payoff of approximately $16.25 million. That comparison does not include approximately $1.32 million in identified expenses.

The debtors seek a surcharge of those expenses against the lender’s collateral. As with Delray Beach, the filing presents a troubling picture for investors hoping the sale will produce substantial proceeds beyond the claimed debt. It does not, however, adjudicate the lender’s rights or establish the investors’ ultimate recovery.

Grapevine: An Apparent Surplus Is Still Not an Investor Distribution

Grapevine presents a different situation. Its $18.125 million sale price exceeds the approximately $15.57 million asserted payoff. The motion also identifies approximately $1.12 million in expenses.

But the motion expressly warns against treating that arithmetic as the final answer. The debtors state that the proceeds are sufficient to pay the asserted payoff and listed expenses in full only if the entire sale price is allocated to collateral securing HPI’s liens. The extent and priority of those liens are disputed.

The proposed order therefore reserves the debtors’ right to pursue a Grapevine surcharge of up to $1,120,919, rather than treating that amount as an additional surcharge already awarded.

For investors, Grapevine illustrates the other side of the same problem: even when a sale price exceeds the stated mortgage payoff, the difference is not automatically available to DST beneficial-interest holders.

Does the $5 Million Fort Myers Holdback Belong to Investors?

Not necessarily.

The October 9th motion identifies a $5 million holdback for Fort Myers, along with holdbacks of $4 million for Delray Beach, $3.3 million for Grapevine and $2 million for Melbourne. The debtors explain that certain confidential settlement agreements provide for money to be held in escrow subject to competing claims, including the surcharge claims.

A holdback means money is being set aside while claims to it are addressed. It does not mean that amount has been reserved for DST investors.

For Fort Myers, the $5 million holdback and the $590,439 difference between the sale price and Stride’s asserted payoff describe different things. The former is an escrow subject to competing claims; the latter is a preliminary calculation before the identified expenses. Neither establishes the amount that investors will receive.

The holdback also should not be added to the sale price as though it were extra proceeds, or subtracted again as though it were a separate expense. It concerns the treatment of proceeds while the competing claims are resolved.

The filing shows that some issues have been addressed through settlements, while specified claims against held-back proceeds remain preserved. That is different from saying either that all earlier objections remain unresolved or that sale approval settled every dispute.

Who Should Pay the Costs of Keeping the Properties Operating and Selling Them?

That is the central question raised by the surcharge motion.

The debtors argue that secured lenders benefited from expenditures needed to preserve the communities, maintain operations and complete the sale process. Those expenditures include investment-banking services, insurance, taxes, operating support and centralized back-office support. IHC is asking the court to make the lenders bear qualifying costs through recoveries from their collateral.

The operating-cost issue is important. According to the debtors, the communities did not generate enough operating income to remain operational without support during the bankruptcy. The debtors say they used debtor-in-possession financing proceeds to fund operating expenses and shared support services. Their argument is that selling operating senior-living communities preserved more value than selling facilities that had ceased operations. These are the debtors’ assertions supporting their request—not separate findings established by filing the motion.

The requested surcharges are $902,838 for Fort Myers, $2,064,311 for Delray Beach and $1,321,250 for Melbourne, with rights reserved concerning Grapevine. Alternatively, the debtors ask the court to limit the lenders’ liens on proceeds to account for expenses that are not recoverable through a surcharge.

A successful motion would not, by itself, authorize payments to DST investors. It would address how certain expenses are recovered and how much collateral proceeds remain subject to lender claims.

Why the Division Between a DST and Its Master Tenant Matters

The dispute is not simply about subtracting one mortgage balance from one sale price.

The motion describes structures in which a DST owns real estate and an affiliated master tenant owns other assets associated with the operating community. In Fort Myers, for example, the debtors state that the master tenant’s assets secure its obligations to the DST under the master lease, but do not secure the DST’s loan obligations to Stride.

That distinction helps explain why the allocation of a transaction’s value can be consequential. Money attributable to one debtor entity’s assets cannot simply be assumed to belong to another entity—or to that other entity’s investors.

The proposed order attached to the October 9th motion expressly states that it would not determine the allocation of sale proceeds between debtors, including a DST debtor and its applicable master tenant. It also preserves disputes concerning claims and liens.

In other words, even a ruling on the surcharge request would leave important investor-recovery questions unanswered.

InvestmentNews Coverage: The Headline Sale Price Is Not a Recovery Percentage

Bruce Kelly addressed these concerns in an October 9 InvestmentNews article, which quoted Iorio Law founder August M. Iorio:

The article compared the approximately $713 million property-sale figure with approximately $1.2 billion in securities sold to investors. That roughly 59% comparison is not an investor recovery rate. It does not deduct the debt and expenses illustrated in Docket No. 1920 or establish how much belongs to any particular DST. Investors should not interpret it as a promise to recover 59 cents on the dollar—or as a determination that their loss will be 41%.

What About Augusta, Eugene and the Other IHC Properties?

The four communities discussed in the October 9th motion should not be treated as a proxy for every IHC DST.

Our previous portfolio chart reported an announced contract price of $29 million for Augusta and $32.13 million for Eugene. Those were gross transaction prices, not estimates of distributions to investors. The earlier update also identified unresolved dispositions for Peachtree and St. Petersburg.

The October 9th motion addresses Fort Myers, Delray Beach, Melbourne and Grapevine. It does not provide a new property-specific recovery calculation for Augusta or Eugene, or establish new dispositions for Peachtree or St. Petersburg. Its figures should not be applied to those other investments.

The property-by-property chart in our first edition provides the earlier reported transaction information. For every property, the important milestones remain distinct: authorization to sell, completion of the sale, allocation of proceeds and authorization of investor distributions. A motion seeking payment of expenses is not proof that those later milestones have occurred.

Investor Rights: Bankruptcy Recoveries and Brokerage Claims Involve Different Questions

The bankruptcy’s allocation of sale proceeds addresses what may remain from the investments and the debtor estates. A potential claim concerning a brokerage firm’s recommendation or sale of an investment addresses different conduct.

FINRA has reminded brokerage firms that recommending private placements requires a reasonable investigation of the issuer and security, alongside applicable best-interest or suitability, disclosure and supervisory obligations. Depending on the circumstances, a legal review may examine the firm’s due diligence, the investor’s financial needs and risk profile, concentration in illiquid investments, and material information disclosed or omitted before the recommendation. A disappointing investment result alone does not establish that a firm violated those obligations.

There is also an important procedural distinction for investors with claims involving both IHC and unrelated securities.

The September 16 Order Reaffirmed That Non-IHC Claims Are Outside the Injunction

On September 16, 2026, the Bankruptcy Court denied the motion to clarify its preliminary injunction. But the court expressly stated that the injunction applies to “IHC Investment-Related Claims, but only IHC Investment-Related Claims.” It reaffirmed footnote 36, which provides that the injunction does not prohibit investors from pursuing non-IHC causes of action against non-debtor defendants. (Adversary Proceeding No. 26-09006, Dkt. 135, paragraph 2.)

InvestmentNews also reported Iorio’s explanation that FINRA is leaving the handling of non-IHC claims to the parties and, ultimately, the arbitration panels in individual cases, including the resolution of objections and procedural disputes.

This distinction can matter for an investor whose arbitration includes both IHC investments and unrelated securities, such as a separate Versity-sponsored DST. The presence of an IHC claim should not automatically be treated as placing every unrelated claim within the injunction.

The September 16 order did not lift the injunction on IHC-related claims, and it does not guarantee that every mixed-investment arbitration will immediately proceed on its non-IHC claims. Investors and counsel must evaluate the particular claims, applicable court orders and case-specific procedural issues.

What Matters Next for DST Investors?

The next consequential developments are not simply additional announcements that sales have been approved. They are the records and rulings that establish:

• Who bears the identified expenses, including the outcome of the surcharge requests and any related lender objections.
• Who is entitled to the held-back proceeds, including the allocation between DSTs and master tenants and the resolution of competing claims.
• What can actually be distributed, after verified closings and the relevant claims, costs and allocation issues are addressed.

Those questions follow directly from the relief requested and the issues expressly preserved in Docket No. 1920.

For Fort Myers investors in particular, the new filing offers reason for concern, not a final answer. The same is true—under different financial circumstances—for investors in Delray Beach, Melbourne and Grapevine.

A sale price tells investors what a buyer has agreed to pay. It does not, standing alone, tell them what they will receive.

Discuss Your IHC DST Investment With Iorio Law

Iorio Law PLLC represents investors in securities arbitration disputes involving Delaware statutory trusts and other complex alternative investments. Investors concerned about an IHC DST, the implications of the property sales, or the brokerage firm’s recommendation can contact Iorio Law for a confidential consultation. Relevant records include offering documents, account statements, communications with the financial adviser, and notices concerning the investment or bankruptcy.

By August M. Iorio | Iorio Law PLLC | October 8, 2026

Iorio Law PLLC is investigating the sales practices of broker-dealers and financial advisors that recommended Priority Income Fund common shares, including recommendations through the Cetera Financial Group network. Our investigation concerns whether the investment matched customers’ financial needs and whether its risks, liquidity restrictions, costs, and distribution characteristics were adequately explained.

Recent disclosures raise serious questions for investors who expected dependable income and preservation of principal. Priority has reported substantial declines in net asset value, reduced monthly common-share distributions, and a July tender that purchased only a fraction of the shares investors submitted. Another limited tender is currently scheduled to expire October 30, 2026. [1–6]

If a Cetera-affiliated advisor or another financial professional recommended Priority Income Fund and you have experienced losses or difficulty accessing your investment, contact Iorio Law PLLC at (646) 330-4624 for a free consultation.

What Is Priority Income Fund?

Priority Income Fund, Inc. is an externally managed, registered closed-end investment company that began operations in May 2013. Its investment adviser is Priority Senior Secured Income Management, LLC. This investigation focuses on its non-traded common shares; the fund’s exchange-listed preferred securities have different rights and risks. [1, 9]

The fund invests primarily in equity and junior debt tranches of collateralized loan obligations, or CLOs. These structures hold pools of loans, generally to below-investment-grade corporate borrowers. Although underlying loans may be senior secured, a CLO’s equity and junior debt sit below more senior claims. That distinction can materially affect an investor’s exposure to credit losses and interrupted cash flows. [2, 9]

An investment in Priority common shares therefore should not be confused with directly holding a diversified portfolio of senior secured loans. The fund’s own materials warn of substantial investment risk and limited liquidity. Common shareholders lack a public trading market and cannot assume that a reported NAV is a price they can obtain when they need to sell. [2, 9]

Priority’s NAV Has Fallen Sharply

Priority’s annual report and subsequent NAV updates show the following per-share values: [1, 2]

The June 2026 NAV was approximately 70.7% below the June 2024 figure. The modest increase from July to August did not reverse that deterioration. A NAV decline is not the same as every shareholder’s realized loss: individual results depend on purchase price, sales charges, cash distributions, reinvestments, and eventual sale proceeds.

For the fiscal year ended June 30, 2026, Priority reported approximately $153.9 million in net realized investment losses and a negative 36.20% total return at NAV. The preceding fiscal year’s NAV total return was negative 34.21%. These fund-level returns assume distribution reinvestment and exclude sales loads; they are not calculations of any particular investor’s loss. [1]

Monthly Distributions Were Cut in June 2026

Priority’s published distribution history shows a monthly common-share payment of $0.05833 in May 2026, followed by $0.03333 in June. The lower amount continued through September. That represents an approximately 42.9% reduction in the monthly payment. [3]

The September 29 distribution announcement promoted a 12.4% annualized cash distribution rate, calculated using $0.40 in annualized distributions and the August 31 NAV of $3.23. That percentage describes cash distributions relative to a particular NAV. It is not a total return, a yield on every investor’s original purchase price, or a guarantee of future payments. [4]

A high distribution percentage can coexist with a falling investment value. Investors who relied on the advertised income rate may have faced both reduced cash payments and diminished principal. Our investigation will examine whether advisors explained this distinction when recommending the fund.

Priority also reported approximately $64.7 million in fiscal 2026 common-share distributions and expected all of them to be classified as return of capital for tax purposes, subject to final determination when its tax return is filed. Tax classification alone does not establish how a payment was funded or prove misconduct. It does reinforce the need to distinguish distributions from investment earnings and total return. [1]

July Tender Results Show the Limits of Investor Liquidity

The July tender expired on July 31, 2026. According to the final results filed August 13, investors tendered 10,184,037 shares, but Priority purchased only 1,550,812 shares at $3.15 each, for approximately $4.9 million. The filing reported 15.23% proration, with qualifying odd-lot holders receiving priority. [5]

Those results show substantial unmet demand to exit. Submitting shares in a tender did not mean that an investor could sell the entire position. Investors may remain exposed to the fund after a liquidity request is only partially fulfilled.

An October Tender Is Open, but Acceptance and Price Are Limited

Priority’s September 18 offer seeks to purchase up to 1,621,557 common shares, equal to 2.5% of shares outstanding as of June 30, 2026. The scheduled deadline is October 30, 2026, at 4:00 p.m. Eastern Time, unless extended. The purchase price will be NAV as of October 31, 2026; it is not fixed at the latest published $3.23 NAV. [6]

The offer can be subject to proration and other stated conditions. It provides an opportunity for limited liquidity, not a guaranteed exit for every shareholder. Investors considering the tender should review the actual offer, submission requirements, and any updates rather than treating this article as tender instructions.

Cetera Financial Group and Priority’s Distribution Network

A Priority subscription package hosted by Preferred Capital Securities expressly states “OFFERED AT CETERA FINANCIAL GROUP.” This establishes that a Cetera-specific offering package existed. It does not, by itself, identify the particular Cetera-affiliated broker-dealer responsible for a customer’s purchase or establish a completed sale by every firm in the network. [7]

Iorio Law is investigating sales practices involving Priority recommendations through Cetera Financial Group and other participating selling broker-dealers. Investors’ purchase confirmations, subscription records, and account statements can identify the legal entity that made or processed a particular recommendation and sale.

Preferred Capital Securities, LLC is separately confirmed in an SEC-filed issuer release as Priority’s dealer manager. That distribution role should be distinguished from the retail brokerage firm that recommended shares to an individual customer. We are examining participating firms’ sales communications, due diligence, compensation, and supervision. [8]

Why Priority Income Fund May Not Have Been Suitable for Some Investors

An investment may be inappropriate for a particular customer even when offering documents disclose its risks. Our review focuses on the recommendation, the customer’s circumstances, and the information reasonably available at the time. Later losses alone do not establish that a sale violated an obligation.

Investors Seeking Capital Preservation

Priority may have been a poor fit for investors who sought to preserve principal or understood the investment as a conservative income holding. We are examining whether sales presentations adequately explained the difference between senior secured loans, subordinated CLO investments, and the risks borne by common shareholders.

Retirees and Investors Who Needed Access to Their Money

A customer who needed readily available funds for retirement spending, healthcare, or foreseeable expenses may have been unable to tolerate the fund’s limited exit opportunities. Our investigation includes whether advisors described optional, limited tenders as if they provided reliable redemption access.

Customers Relying on a Stated Distribution Rate

We are reviewing whether advisors distinguished cash payments from earnings and total investment return. An income recommendation should account for the possibility of reduced payments and principal losses, particularly when a customer depends on the investment to meet recurring expenses.

Investors Exposed to Excessive Concentration or Sales Costs

The amount invested matters as much as the product’s general characteristics. We are examining recommendations that concentrated customers’ savings in Priority, CLO funds, or other illiquid investments, and whether advisors considered the customer’s remaining liquid assets.

The October 2024 prospectus disclosed sales commissions of up to 6% and dealer-manager fees of up to 0.75% for Class R purchases, subject to applicable terms and waivers. Other purchase designations had different charges. Our review will consider the actual costs and compensation associated with each investor’s transaction and how those costs affected the recommendation. [9]

What Iorio Law Is Investigating

Our investigation includes whether selling firms and financial professionals:

• Reasonably evaluated Priority’s CLO exposure, financial condition, liquidity provisions, and offering materials before recommending it.
• Matched the recommendation and investment amount to the customer’s objectives, risk tolerance, liquidity needs, and time horizon.
• Accurately explained distributions, potential principal losses, and the limits of NAV-based valuations and issuer tenders.
• Disclosed relevant costs and conflicts and supervised sales presentations and recommendations.

For retail brokerage recommendations subject to Regulation Best Interest, the SEC requires consideration of risks, rewards, and costs in light of the customer’s investment profile. Applicable obligations depend on the date and nature of the recommendation and the professional’s role. [10]

This investigation is not a finding that Cetera Financial Group, Preferred Capital Securities, or another firm engaged in misconduct. Assessing a potential claim requires the customer’s records and the circumstances surrounding the recommendation.

Contact Iorio Law About a Priority Income Fund Investment

Depending on the facts, investors may have claims involving unsuitable or otherwise improper recommendations, misleading statements or omissions, or inadequate supervision. Brokerage disputes are commonly pursued through FINRA arbitration. Neither declining NAV nor a restricted tender alone guarantees a claim or recovery.

Preserve purchase confirmations, subscription agreements, brokerage statements, offering materials, advisor emails and texts, risk questionnaires, and tender notices. Records of the original investment, fees, distributions, and unsuccessful exit requests can help explain the recommendation and its consequences.

Iorio Law PLLC represents investors nationwide in disputes involving brokerage firms and financial professionals. If a Cetera-affiliated advisor or another broker recommended Priority Income Fund and you have concerns about losses, liquidity, or the sales presentation, call (646) 330-4624 or visit www.iorio.law/contact-us/ for a free consultation.

This investigation is part of the Iorio Law Distressed Securities Monitor, which tracks material financial and liquidity developments in investments distributed through brokerage and advisory channels.

By August M. Iorio | Iorio Law PLLC | October 7, 2026

Iorio Law PLLC is investigating the sales practices of broker-dealers and financial professionals that recommended VineBrook Homes Trust, Inc., including Raymond James & Associates, Inc. Our investigation concerns whether recommendations were appropriate for individual investors and whether liquidity restrictions, investment risks, costs, and conflicts of interest were adequately explained.

The investigation follows VineBrook’s October 6 announcement that its $33-per-share tender offer was substantially oversubscribed. Shareholders sought to sell roughly three times the number of shares the company offered to purchase. VineBrook expects to repurchase only about one-third of the shares tendered, leaving investors with much of their requested exit unfulfilled. The results are preliminary.

If a financial advisor recommended VineBrook and you are experiencing investment losses or difficulty accessing your capital, contact Iorio Law PLLC at (646) 330-4624 for a free consultation.

What Is VineBrook Homes Trust

VineBrook Homes Trust is a non-traded real estate investment trust focused on single-family rental housing. Formed as a Maryland corporation on July 16, 2018, it sought to generate cash distributions and long-term appreciation through residential real estate. It is externally advised by NexPoint Real Estate Advisors V, L.P.

VineBrook’s historical private offering used Regulation D and other registration exemptions and was sold to accredited investors. The offering closed on September 14, 2022. Investors purchased shares in the REIT rather than direct ownership of particular rental homes.

A non-traded REIT can own substantial real estate while providing shareholders very limited access to their investment. VineBrook shares have never had a public trading market, and an issuer’s estimated net asset value does not guarantee an investor can sell at that price.

Ordinary Share Repurchases Have Generally Been Suspended Since 2022

VineBrook disclosed that repurchases under its ordinary share-repurchase plan have been suspended since December 2022, generally subject to limited exceptions involving death, disability, or similar hardship. Its September 2026 shareholder letter described the tender as an opportunity for limited liquidity following that prolonged suspension.

That distinction matters to investors who expected redemption access to fund retirement spending, medical expenses, or other foreseeable needs. A repurchase program subject to suspension is not the equivalent of a guaranteed exit.

October 2026 Tender Results Show Substantial Unmet Demand

The tender expired on October 5, 2026. VineBrook announced the following preliminary results the next day:

• Offer price: $33 per Class A common share.

• Shares tendered and not withdrawn: approximately 2,753,350.

• Shares expected to be purchased: 909,090, for approximately $30 million.

• Announced preliminary proration factor: approximately 32.98%.

For illustration, an investor who tendered 1,000 shares would expect approximately 330 shares to be purchased for about $10,890, with roughly 670 shares remaining invested. Actual purchases depend on final confirmation and adjustments for fractional shares. The company said it would announce final results after confirmation.

The tender provides some liquidity, but it does not resolve shareholders’ overall ability to exit.

The $33 Tender Price Is Substantially Below Stated NAV

VineBrook reported stated NAV of $52.68 per share as of June 30, 2026. The $33 tender price is approximately 37.4% below that figure. Shareholders therefore sought substantial liquidity even at a steep discount to the company’s stated valuation.

That discount is not automatically a 37.4% loss for every investor, nor does it establish that all remaining shares are worth $33. Individual economic results depend on purchase price, fees, distributions, reinvestments, and ultimate sale proceeds. A limited issuer tender also differs from an open-market valuation.

VineBrook has expressed optimism about its strategy and continued pursuit of longer-term liquidity opportunities. Its current restrictions do not themselves establish insolvency or misconduct. They do, however, make the original explanation of liquidity and valuation important subjects for investigation.

VineBrook Borrowed to Help Finance the Tender

On September 28, 2026, VineBrook disclosed a $25 million credit agreement with The Ohio State Life Insurance Company. Together with cash on hand, the financing was intended to fund the tender. The agreement carries 10% annual interest, matures September 28, 2027, and includes a 1% origination fee and a 1% exit fee on principal repaid.

The filing also states that the lender may be deemed affiliated with VineBrook’s external adviser through common beneficial ownership. Borrowing to finance a tender is not inherently improper, but the cost, repayment requirements, and potential affiliation warrant examination when evaluating the company’s liquidity strategy.

Which Broker Dealers Sold VineBrook Homes Trust

VineBrook’s SEC-filed annual report identifies Raymond James & Associates, Inc. and other unaffiliated broker-dealers as placement agents operating under selling agreements. It also describes compensation on shares Raymond James actually sold. This establishes direct distribution participation, beyond simply holding shares in customer accounts.

According to that report, historical Raymond James sales generally involved a 3% placement fee and a 2% advisory fee on gross proceeds invested, in addition to the NAV sales price, subject to applicable waivers. Other placement agents generally received fees or commissions ranging from 1% to 5.5%, subject to their agreements.

Iorio Law is investigating Raymond James’s VineBrook recommendations and the sales practices of other participating selling broker-dealers.

NexPoint Securities, Inc. is confirmed as the historical dealer manager. That role is distinct from the broker that recommended shares to a particular investor. RBC Capital Markets, LLC served as dealer manager for the 2026 tender; that tender role does not establish that RBC sold the original investment.

Why VineBrook May Not Have Been Suitable for Some Investors

VineBrook may have been inappropriate for investors whose financial circumstances required ready access to principal, limited exposure to illiquid assets, or a lower level of investment risk. The relevant inquiry concerns the recommendation and information available at the time of sale. Subsequent difficulties alone do not establish an unsuitable recommendation.

Liquidity Needs and Investment Time Horizon

VineBrook’s 2021 registration statement itself warned that common shares were a long-term, illiquid investment intended for investors able to commit funds for an indefinite period. That disclosure makes the customer’s actual liquidity needs and any contrary sales assurances central to our review.

We are examining whether advisors recommended VineBrook to customers who needed funds within a foreseeable period, and whether they explained that repurchases could be restricted or suspended. A retiree’s need to fund living expenses or an investor’s anticipated large expenditure can materially affect whether a long-term illiquid investment fits the account.

Capital Preservation and Risk Tolerance

We are investigating whether VineBrook was presented as a conservative substitute for readily accessible savings or other lower-risk holdings. Ownership of rental homes does not guarantee the value of REIT shares or an investor’s ability to recover principal. The inquiry includes how property, financing, valuation, and exit risks were explained.

Portfolio Concentration

Even an investor able to tolerate one illiquid position may face different risks when substantial assets are committed to VineBrook and similar products. Our review will consider the size of the recommendation relative to liquid assets, other real estate exposure, and the customer’s overall financial needs.

Fees and Accredited Investor Status

Sales compensation and ongoing expenses affect investment economics and can create conflicts requiring attention. We are examining how costs and compensation were disclosed and considered when recommending VineBrook. Meeting accredited-investor eligibility requirements does not establish that a particular investment was appropriate. FINRA’s private-placement guidance expressly treats financial eligibility as only one consideration in a complete suitability analysis.

What Iorio Law Is Investigating

Our investigation focuses on whether selling firms and advisors:

• Conducted a reasonable investigation of VineBrook, its structure, financial condition, and offering representations before recommending it.

• Accurately explained the absence of public-market liquidity and the limits of any repurchase program.

• Distinguished estimated NAV from a price investors could reliably obtain when selling.

• Matched recommendations and investment amounts to each customer’s liquidity needs, objectives, risk tolerance, and time horizon.

• Disclosed material costs and conflicts and appropriately supervised recommendations and sales communications.

For retail brokerage recommendations subject to Regulation Best Interest, firms must evaluate risks, rewards, and costs in light of the customer’s investment profile. The applicable standards depend on the recommendation date and whether the professional acted as a broker or investment adviser. The SEC’s staff guidance also emphasizes consideration of reasonably available alternatives.

These are investigative questions, not findings that Raymond James, NexPoint Securities, or another firm violated any obligation. A valid assessment requires the investor’s account records, offering materials, communications, and the circumstances of the recommendation.

Options for VineBrook Investors

Depending on the facts, investors may have grounds to pursue claims against a recommending brokerage firm or financial professional concerning unsuitable recommendations, misleading statements or omissions, or supervisory failures. Brokerage disputes are commonly pursued through FINRA arbitration. Neither an investment decline nor a restricted tender guarantees a viable claim or recovery.

Investors should preserve purchase confirmations, subscription agreements, offering documents, brokerage statements, advisor emails and texts, risk questionnaires, and tender notices. Records showing the original purchase price, fees, distributions received, and unsuccessful exit requests can help explain both the recommendation and its financial consequences.

Contact Iorio Law About a VineBrook Investment

Iorio Law PLLC represents investors nationwide in disputes involving brokerage firms and financial professionals. If Raymond James or another advisor recommended VineBrook Homes Trust and you have concerns about investment losses, restricted liquidity, or the sales presentation, call (646) 330-4624 or contact us online for a free consultation.

This investigation is part of the Iorio Law Distressed Securities Monitor, which tracks material financial and liquidity developments in investments distributed through brokerage and advisory channels.

Updated October 6, 2026  |  By August M. Iorio | Iorio Law PLLC        

On October 5, 2026, the U.S. Bankruptcy Court for the Northern District of Texas granted Inspired Healthcare Capital’s motion to sell a substantial portion of its senior-living portfolio. The approved transaction package has been reported at approximately $713 million for 30 senior-living communities, marking one of the most significant developments since Inspired Healthcare Capital Holdings, LLC and its affiliates filed for Chapter 11 bankruptcy in February. Source: Law360

For Inspired Healthcare Capital (“IHC”) Delaware Statutory Trust (“DST”) investors, however, the sale approval does not mean that investors are about to receive $713 million – or that an investor’s recovery can be calculated from the sale price of his or her property.

The transactions still must proceed through the closing process. Secured debt and other property-level obligations must be addressed, transaction expenses and bankruptcy costs must be accounted for, and – in several instances – the court must determine how sale proceeds should be allocated among DST entities and related operating or master-tenant entities. Those allocation issues were among the subjects litigated during the sale hearing. Background: Bloomberg Law

This is the first edition of the IHC Bankruptcy Monitor, a new Iorio Law PLLC series providing weekly updates for Inspired Healthcare Capital DST investors. We will review the bankruptcy docket throughout the week, publish a comprehensive update each week, and issue additional reports when significant breaking developments occur.

IHC Bankruptcy: Key Developments as of October 6, 2026

• IHC and 160 affiliated entities remain in Chapter 11. The cases are jointly administered under In re Inspired Healthcare Capital Holdings, LLC, et al., Case No. 26-90004 (MXM), in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division. Joint administration is for procedural purposes only; it does not mean that the assets and liabilities of all 161 debtors have simply been combined.
• Thirty-one IHC DST entities are Chapter 11 debtors. The U.S. Trustee subsequently appointed an Official Committee of DST Investors to represent DST investors’ interests in the bankruptcy proceedings.
• The court approved IHC’s major asset-sale motion on October 5, 2026. Contemporary reporting describes the approved sale package as approximately $713 million involving 30 senior-living communities.
• Approval does not establish investor recoveries. Disputes concerning allocation of sale proceeds and other issues remain important, and completed closings must still be distinguished from court-authorized sales.
• Certain IHC-related FINRA claims against broker-dealers remain subject to a preliminary injunction. The injunction is presently scheduled to expire on November 21, 2026, unless modified or extended; appeals remain pending.

What Is the Inspired Healthcare Capital Chapter 11 Bankruptcy About?

Inspired Healthcare Capital and its affiliates filed voluntary Chapter 11 petitions on February 2, 2026.

The IHC enterprise is unusually complex. The bankruptcy encompasses 161 debtor entities, including operating companies, investment funds, development entities, master tenants and 31 separate DST debtors. Before bankruptcy, IHC stated that it had raised more than $1.2 billion in cash from thousands of fund, DST and development investors.

A Chapter 11 bankruptcy generally allows a company to remain in possession of its assets and continue operating while restructuring its financial affairs under court supervision. A debtor may also seek court permission under Section 363 of the Bankruptcy Code to sell assets outside the ordinary course of business. U.S. Courts Chapter 11 overview

That is essentially what has happened here.

Although Chapter 11 is often described as a “reorganization,” the IHC cases have developed into a sale-driven restructuring. IHC obtained authority for a court-supervised marketing and bidding process, identified stalking-horse bidders, conducted an auction process, designated successful bidders, and then sought court approval of the resulting transactions. See IHC sale filings

The October 5 ruling represents a major transition in the case: the focus now begins shifting from obtaining authority to sell assets toward closing transactions, determining what net proceeds remain, allocating those proceeds among the appropriate debtor entities, resolving claims, and ultimately determining what can be distributed to investors and other stakeholders.

See Also: My DST Filed for Bankruptcy. Now What?

Current Status of Each IHC DST and Property

The U.S. Trustee’s records identify 31 IHC DST entities currently in Chapter 11.

Successful-bidder notices filed in September disclosed contractual sale prices for 29 DST-linked properties. The Bankruptcy Court has now granted the overarching sale motion, but as of this update we are treating these transactions as court-authorized sales with closing and final proceeds allocation still pending, rather than reporting them as completed investor dispositions.

Table note: The September successful-bidder disclosures also identified a separate Augusta vacant-land parcel with an announced price of approximately $4.03 million. The contractual prices shown above are gross transaction prices – not estimated distributions to DST investors. The September notices provided prices for the 29 DST-linked properties listed above; Peachtree and St. Petersburg were not among the notices in which we located an announced successful-bid price.

We will update this chart each week as sale orders are entered, transactions close, proceeds are allocated, additional assets are sold, or investor recovery information becomes available.

Why a $713 Million Sale Does Not Mean $713 Million Is Available to IHC Investors

This distinction is critical.

A DST property’s sale price is not the same thing as the equity available to its DST investors.

Before investors can know what a particular property sale may produce for them, the bankruptcy process may have to account for, among other things, secured mortgage debt and other liens; debtor-in-possession financing and court-approved financing obligations; taxes and closing adjustments; transaction expenses; bankruptcy professional fees and administrative expenses; other allowed claims or reserves; and disputes over how proceeds should be allocated between a DST that owns real estate and affiliated master-tenant or operating entities.

That last issue has already become important in the IHC case. During the sale proceedings, certain lenders and other parties objected to aspects of the transactions and raised concerns over how proceeds would be divided among the entities involved. The October 5 ruling permits the sales to proceed while leaving certain proceeds-related issues for later resolution. Background: Bloomberg Law

The number that ultimately matters is the net amount attributable to the DST after debt, expenses, allocations, claims and other obligations are resolved.

Which Broker-Dealers Sold Inspired Healthcare Capital DSTs?

IHC did not distribute its DST investments through a single brokerage firm.

Public bankruptcy records state that, beginning in 2020, Emerson Equity LLC served as IHC’s managing broker-dealer and worked with soliciting dealers and recommending advisers to market IHC private placements, including DST interests. IHC’s bankruptcy complaint specifically identifies Emerson as the managing broker-dealer and Aurora Securities, LightPath Capital, the firm identified in the complaint as Quincy Wells Capital “in interest of Great Point Capital,” and Realized Financial as soliciting dealers.

Public records, SEC filings, court filings, brokerage financial statements and reported investor claims identify the following firms in connection with the sale or distribution of IHC DSTs:

The evidence concerning each firm is not identical, and the list may grow as additional records become public.

For example, SEC Form D filings for the Augusta, Fort Myers and Eugene DST offerings identify American Alternative Capital, LLC as the recipient of sales compensation. SEC Form D example

Concorde Investment Services has stated in a sworn bankruptcy-court declaration that it helped IHC sell 100% of the beneficial interests in the Augusta DST and Fort Myers DST and approximately 20% of the Eugene DST. (Docket No. 1454, Delongchamp Declaration, paragraph 5.)

The IHC bankruptcy complaint itself identifies Aurora Securities, LightPath Capital and Realized Financial as soliciting dealers. It identifies Quincy Wells Capital “in interest of Great Point Capital”; Quincy Wells has publicly stated that it was newly formed in 2026 and did not participate in the historical IHC transactions, which it says were conducted through Great Point Capital.

Other public records identify additional firms. For example, 1031 Securities’ audited financial statements disclose that six of its customers invested in IHC investment vehicles and that one FINRA arbitration was pending as of year-end 2025. 1031 Securities audited financial statements

The identification of a broker-dealer as having sold, distributed or been involved with an IHC investment is not a finding that the firm or any financial adviser engaged in wrongdoing or is liable for an investor’s losses. Those issues depend on the facts of the individual recommendation, the firm’s due diligence and supervision, the disclosures made to the investor, applicable law and other circumstances.

What Happens Next in the IHC Bankruptcy?

The October 5 sale ruling is important, but it is not the end of the bankruptcy.

As of the morning of October 6, the court docket reflects that the sale motion was granted. We have not treated the individual property transactions as closed merely because the sale was authorized.

First, the sale documentation and closings. Final orders and transaction documents will establish the precise terms under which the approved transactions may close. Applicable closing conditions must then be satisfied and ownership of the properties transferred.

Second, debt repayment and calculation of net proceeds. Property-level secured lenders and other obligations may substantially affect how much equity remains from an individual transaction.

Third, allocation of sale proceeds. This may be one of the most consequential phases for DST investors. The IHC structure frequently involved a DST that owned the real estate and an affiliated master tenant or operating entity. Disputes over how value should be allocated among those entities can directly affect what remains at the DST level.

Fourth, resolution of claims and bankruptcy expenses. The estates must address claims, objections, reserves, professional fees and other administrative obligations before final distributions can be determined.

Fifth, a Chapter 11 plan or other court-approved wind-down structure. Chapter 11 ordinarily culminates in a plan governing how the estate’s remaining assets and proceeds will be treated and distributed. As of this update, no confirmed Chapter 11 plan establishes final recoveries for IHC DST investors. U.S. Courts Chapter 11 overview

Finally, distributions. Only after the relevant sales close, net proceeds and allocations are known, claims are resolved and a distribution mechanism is approved will investors have a clearer answer to the central question: How much will I recover from my IHC DST through the bankruptcy?

What About Claims Against the Broker-Dealer That Recommended an IHC DST?

A potential claim against the brokerage firm or financial professional that recommended an IHC investment raises issues distinct from determining an investor’s distribution through the bankruptcy.

However, there is an important procedural complication right now.

On July 24, 2026, Bankruptcy Judge Mark X. Mullin entered a preliminary injunction temporarily halting more than 100 IHC-related FINRA arbitrations and other proceedings involving IHC’s broker-dealer network and former CEO Luke Lee. On September 16, the court rejected a request that would have narrowed aspects of the injunction. The injunction is presently scheduled to remain in effect through November 21, 2026, unless the bankruptcy court or an appellate court modifies or extends it. Appeals concerning the injunction remain pending. AltsWire report on the September ruling

That issue is separate from whether an investor ultimately possesses a viable claim. Investors can still evaluate their circumstances, preserve relevant documents and obtain legal advice concerning potential claims while the injunction remains in place. Iorio Law PLLC encourages all DST investors to contact our law firm to review their legal rights.

We will continue tracking the injunction and related appeals as part of the IHC Bankruptcy Monitor.

Frequently Asked Questions About the IHC Bankruptcy

Did the Bankruptcy Court approve the sale of IHC’s properties?

Yes. On October 5, 2026, a Texas bankruptcy judge gave IHC authority to sell 30 senior-living communities for approximately $713 million. Law360 report

Have the IHC DST property sales closed?

Not necessarily. Court approval authorizes the transactions to proceed but is not the same thing as verifying that every individual transaction has closed. The IHC Bankruptcy Monitor will distinguish between a proposed sale, an approved sale and a completed closing.

How much will IHC DST investors recover?

It is too early to determine. No final recovery percentage has been established for IHC DST investors. The answer will depend on the particular DST, property sale price, debt, expenses, allocation of proceeds, claims and other bankruptcy obligations.

Are all IHC DSTs part of the bankruptcy?

The Chapter 11 cases include 31 specifically identified DST debtor entities. Investors should determine the precise legal name of the DST they own because different IHC investment vehicles can have materially different assets, debts and recovery prospects.

When will IHC DST investors receive bankruptcy distributions?

No final distribution date has been announced. Investors should expect additional proceedings involving closings, proceeds allocation, claims and ultimately a Chapter 11 plan or other court-approved distribution process before final recoveries are known.

What is a Section 363 sale?

Section 363 of the Bankruptcy Code allows a Chapter 11 debtor, after notice and court approval, to sell property outside the ordinary course of business. Under appropriate circumstances, property can be sold free and clear of liens and other interests, with creditor rights addressed through the sale proceeds and applicable court orders. U.S. Courts Chapter 11 overview

Can an IHC investor pursue the brokerage firm that sold the investment?

Yes. However, potential broker-dealer claims are fact-specific and distinct from the investor’s bankruptcy recovery. Iorio Law PLLC encourages all DST investors to contact our law firm to review their legal rights.

IHC Bankruptcy Monitor: What We Will Track

The IHC Bankruptcy Monitor will be updated weekly for Inspired Healthcare Capital DST investors. We will follow property closings; purchase-price changes; mortgage and secured-debt payoffs; allocation of proceeds between DSTs and affiliated entities; estimated investor equity and recoveries; developments involving Peachtree and St. Petersburg; Chapter 11 plans and disclosure statements; objections and settlements; significant investigations; the FINRA injunction and appeals; and material hearings and deadlines.

When a development is significant enough that investors should not wait for the weekly report, we will publish a separate IHC Bankruptcy Monitor Breaking News update.

About Iorio Law PLLC

Iorio Law PLLC represents investors in securities arbitration disputes involving Delaware Statutory Trusts and other complex alternative investments. If you invested in an Inspired Healthcare Capital DST and would like to discuss how the bankruptcy proceedings, property sales or potential claims involving the recommendation of the investment may affect your rights, you can contact Iorio Law PLLC for a confidential consultation.

This article is for informational purposes only and does not constitute legal, tax or investment advice. Bankruptcy proceedings can change quickly, and information concerning proposed or approved transactions may change before closing. The identification of any brokerage firm or financial professional does not constitute a finding of wrongdoing or liability. Past results do not guarantee future outcomes.

An investment does not have to enter bankruptcy before investors have reason for concern.

A non-traded REIT may stop allowing shareholders to redeem their shares. A private-credit fund may honor only a fraction of investors’ withdrawal requests. A DST may stop making distributions. A bond issuer may extend maturities or miss payments. A fund may continue paying substantial monthly distributions even while its net asset value declines.

These developments can emerge months—or even years—before the extent of an investor’s ultimate loss becomes clear.

Iorio Law PLLC is launching the Iorio Law Distressed Securities Monitor to track those developments.

The Monitor will identify securities and investment products showing signs of financial impairment, illiquidity, default, restructuring, declining value, or other stress, with particular attention to investments sold to individual investors through brokerage firms and financial advisors.

Our objective is not to label every investment experiencing difficulty as a “failure,” nor does inclusion in this series mean that a brokerage firm or financial professional did anything wrong.

Instead, we will focus on a narrower set of questions:

What is happening to the investment? How much investor capital may be at risk? Can investors access their money? Who sold the investment? And what should investors be watching next?

What the Iorio Law Distressed Securities Monitor Will Track

The Monitor will follow a broad range of investments commonly sold through brokerage and wealth-management channels, including:

• Delaware Statutory Trusts, or DSTs;
• non-traded real estate investment trusts, or REITs;
• non-traded business development companies, or BDCs;
• private-credit and interval funds;
• private placements and Regulation D offerings;
• corporate notes and bonds;
• preferred stock;
• structured and market-linked investments;
• real-estate and opportunity-zone funds; and
• other alternative investments sold to individual investors.

We will look for events including bankruptcy, missed payments, suspended distributions, declining net asset values, tender offers at substantial discounts, redemption suspensions, repeated withdrawal prorations, distressed restructurings, looming debt maturities, lender enforcement activity, asset sales, accounting concerns, and regulatory proceedings.

We will also attempt to identify which broker-dealers and financial-advisor networks distributed the investment.

That distinction matters.

The sponsor or issuer creates the investment. A dealer manager may organize its distribution. A selling broker-dealer or financial advisor may recommend the investment to the individual investor. A custodian may simply hold it in an account.

Those roles are different, and we will try to identify them accurately.

Investments We Are Currently Monitoring

Our research through September 30, 2026 identifies several investments that warrant continuing attention.

These investments are not experiencing the same problems, and they should not be treated as though they are.

Some involve realized financial distress. Others currently present primarily a liquidity problem. Still others are emerging situations where future investor losses remain uncertain.

That distinction will be central to this series.

Inspired Healthcare Capital: Bankruptcy After More Than $1 Billion Was Raised From Investors

Inspired Healthcare Capital, or IHC, is one of the clearest examples of the type of investment the Distressed Securities Monitor will follow.

IHC and numerous affiliated entities entered Chapter 11 bankruptcy in February 2026 after investor distributions had been suspended.

According to reporting based on IHC’s bankruptcy declaration, IHC raised more than $1.2 billion since 2016 from approximately 3,300 investment-fund investors, 2,300 DST investors, and 200 development investors. The same bankruptcy materials reportedly state that broker-dealers received more than $100 million in commissions and fees.  InvestmentNews source

That does not mean investors have suffered a confirmed $1.2 billion loss.

The amount raised is different from the amount investors may ultimately recover. Recoveries will depend on the particular IHC security, the assets and liabilities held by the relevant entity, secured mortgage debt, bankruptcy expenses, asset-sale proceeds, and other claims.

The distribution network is nevertheless important.

Bankruptcy-related materials identify Emerson Equity as managing broker-dealer for 29 IHC DST offerings and all IHC investment funds.  InvestmentNews source

That does not establish that Emerson personally recommended every IHC investment to every customer. Many offerings were sold through additional brokerage firms and financial professionals, which must be identified on an investment-by-investment basis.

What we are watching

For IHC investors, we will continue tracking:

• sales and dispositions of individual senior-housing properties;
• the debt associated with each property;
• proceeds potentially available to particular DSTs and investment funds;
• how bankruptcy-sale proceeds are allocated among different IHC entities;
• investor distributions through the bankruptcy process; and
• the brokerage firms that sold each IHC security.

For DST investors in particular, the headline bankruptcy sale price for an IHC property may reveal relatively little unless it is compared with the property’s secured debt and the particular entity in which the investor owns an interest.

Priority Income Fund: Declining NAV, Realized Losses, and Limited Liquidity

Priority Income Fund is a different type of emerging investor-loss situation.

Priority is a non-traded closed-end investment company that invests primarily through collateralized loan obligations, or CLOs, including CLO equity and junior debt interests.

Its recent financial performance has deteriorated substantially.

Priority reported net asset value of:

• $10.85 per common share at June 30, 2024;
• $6.14 at June 30, 2025; and
• $3.18 at June 30, 2026.

The fund’s reported NAV total return was negative 34.21% for fiscal 2025 and negative 36.20% for fiscal 2026.  SEC annual report

Those total-return figures are particularly important because they account for distributions rather than simply comparing two NAV figures.

For the year ended June 30, 2026, Priority reported approximately $153.9 million of net realized investment losses and a $119.2 million decrease in net assets resulting from operations. Its financial statements classified approximately $64.7 million of distributions to common shareholders during the fiscal year as return of capital.  SEC annual report

Liquidity has also become increasingly important.

In Priority’s tender offer that expired July 31, 2026, shareholders attempted to tender more than 10.18 million shares. Priority purchased approximately 1.55 million shares, meaning participating investors had only about 15.23% of the shares they tendered repurchased. The repurchase price was $3.15 per share, equal to July 31 NAV.  SEC tender results

Priority launched another tender in September, again offering to purchase only 2.5% of outstanding common shares. The fund expressly states that the tender program is intended to provide liquidity because there otherwise is no public market for the common shares.  SEC tender offer

How Priority Income Fund reached individual investors

Preferred Capital Securities LLC serves as Priority Income Fund’s dealer manager. Priority’s offering documents contemplate purchases through selected broker-dealers and financial representatives.  SEC offering document

Distribution materials also show that Priority Income Fund was offered through the Cetera Financial Group network, including a Priority subscription package specifically labeled “Offered at Cetera Financial Group.” The particular legal Cetera broker-dealer involved in an individual investor’s transaction still must be determined from the account and subscription records.  Cetera subscription package

What we are watching

Priority warrants continued monitoring because it combines several different warning signs:

• substantial NAV deterioration;
• large realized investment losses;
• sharply negative recent total returns;
• return-of-capital distributions; and
• heavily oversubscribed tender offers.

Future Monitor updates will examine whether NAV stabilizes, the results of subsequent tender offers, changes in distributions, and the broker-dealer networks through which the fund was sold.

VineBrook Homes Trust: Limited Liquidity at $33 Per Share Versus a $52.68 Stated NAV

VineBrook Homes Trust is a non-traded REIT focused primarily on single-family rental housing.

Its current tender offer creates an unusually important data point for shareholders.

VineBrook is offering to purchase up to $30 million of Class A common shares at $33 per share. The offer is scheduled to expire October 5, 2026 unless extended or withdrawn.  SEC tender filing

VineBrook reported a June 30, 2026 stated NAV of $52.68 per share.

Accordingly, the current issuer tender provides liquidity at a price substantially below the company’s reported NAV.

That difference should not automatically be characterized as an investor loss of the same percentage.

A tender offer is a limited liquidity transaction. NAV is an internally determined valuation measure. Individual investors also purchased their shares at different prices.

But the gap is significant because VineBrook shareholders have had limited access to their investment. The company’s ordinary share-repurchase program has generally been suspended for several years, and VineBrook says the current tender is intended to provide shareholders with limited liquidity in the absence of a public market.  SEC tender materials

Raymond James participated in VineBrook’s distribution

The brokerage evidence is unusually clear.

VineBrook’s SEC filings state that Raymond James & Associates and other unaffiliated broker-dealers acted as placement agents pursuant to selling agreements.  VineBrook annual report

The company reported that shares sold through Raymond James generally carried a 3% placement fee plus a 2% advisory fee based on gross proceeds invested, subject to applicable terms and waivers. Other placement agents generally received commissions ranging from 1% to 5.5%.

This is materially different from merely finding VineBrook shares held in a Raymond James account. The SEC filings describe Raymond James as participating directly in the offering and sale process.

NexPoint Securities also served in a distribution-related role. RBC Capital Markets, by contrast, is the dealer manager for the current 2026 tender offer; that current tender role does not establish that RBC sold shareholders their original VineBrook investment.  SEC annual filing

What we are watching

The October tender should provide useful information regarding:

• how many shareholders seek liquidity at $33;
• whether the tender becomes oversubscribed and is prorated;
• how the tender price compares with future stated NAVs;
• VineBrook’s future shareholder-liquidity plans; and
• the identities and sales volumes of the other broker-dealers that distributed VineBrook shares.

VineBrook is precisely the type of investment the Distressed Securities Monitor is designed to follow before the ultimate investor outcome is known. Read more: VineBrook Homes Trust Investigation

KBS REIT III: Going-Concern Warning and Approximately $1.2 Billion of Near-Term Debt Obligations

KBS Real Estate Investment Trust III presents a combination of declining valuation, lost investor income, limited liquidity, and significant refinancing risk.

Its June 30, 2026 Form 10-Q states that, as of August 13, KBS had approximately $1.2 billion of loan maturities and required principal paydowns during the following twelve months.  SEC Form 10-Q

KBS also disclosed that six debt facilities covering eleven properties were subject to lender cash-sweep arrangements. Management stated that these conditions raise substantial doubt about the company’s ability to continue as a going concern.

A going-concern warning does not mean that KBS REIT III has filed bankruptcy or will necessarily do so.

KBS reported that it remained in compliance with its financial debt covenants as of June 30 and has refinanced, restructured, extended, paid down, or otherwise addressed substantial amounts of debt since 2024.  SEC Form 10-Q

Nevertheless, shareholders were already experiencing substantial impairment before the current refinancing pressure emerged.

KBS’s estimated value per share declined materially, shareholder distributions have been absent since 2023, and its ordinary share-redemption program was terminated in 2024.

Ameriprise and Securities America participated in KBS REIT III sales

The distribution record is particularly important for individual investors.

SEC-filed selected-dealer agreements identify Ameriprise Financial Services and Securities America as brokerage firms authorized to offer and sell KBS REIT III shares.

Those agreements provided for selling commissions and dealer-related compensation on shares actually sold by the participating broker-dealer.

This type of evidence is stronger than the appearance of an investment on a brokerage statement: it establishes that these firms participated in the product’s distribution program.

What we are watching

KBS REIT III deserves close monitoring for:

• extensions, restructurings, or defaults involving near-term mortgage maturities;
• property sales undertaken to meet lender requirements;
• additional property impairments;
• further changes in estimated share value;
• potential resumption—or continued absence—of investor distributions; and
• the amount of KBS REIT III sold through individual brokerage firms.

BCRED: Repeated Redemption Pressure Without Evidence of Insolvency

Not every investment in this series will resemble IHC, Priority Income Fund, VineBrook, or KBS REIT III.

Blackstone Private Credit Fund, commonly known as BCRED, illustrates why liquidity restrictions and investment failure should not be treated as the same thing.

BCRED is a very large non-traded private-credit BDC.

During 2026, investor requests to repurchase shares repeatedly exceeded the amount BCRED ordinarily makes available under its quarterly repurchase program.

That is important to investors who expected to access their capital.

It does not, by itself, establish that BCRED is insolvent or that investors have suffered a comparable principal loss.

This is the type of distinction the Monitor will emphasize.

A security can become materially less liquid without failing financially. Conversely, an investment may continue making distributions even as its underlying financial condition deteriorates.

BCRED is especially relevant because its shareholder and tender materials demonstrate ownership through numerous large wealth-management channels, including clients associated with Merrill Lynch, Morgan Stanley, UBS, LPL Financial, Raymond James, Edward Jones, Stifel, and other firms.

The existence of client positions at a firm does not establish that the firm or a particular advisor recommended every original purchase. That question requires transaction-specific evidence.

What we are watching

For BCRED and similar private-credit products, we will monitor:

• quarterly repurchase requests;
• repeated re-tendering by investors whose prior requests were prorated;
• NAV changes;
• non-accrual loans and portfolio credit deterioration;
• leverage and available liquidity; and
• the amount of customer exposure at particular brokerage firms.

Other Investments Currently on the Monitor

The investments discussed above are only part of the developing research universe.

We are also closely following:

North Haven Private Income Fund

The Morgan Stanley-managed private-credit fund experienced three consecutive materially oversubscribed 2026 repurchase periods. The product is especially relevant because tender documentation expressly routes investors through their Morgan Stanley Financial Advisor or Private Wealth Advisor.

Starwood Real Estate Income Trust

Effective April 29, 2026, Starwood Real Estate Income Trust, or SREIT, amended its share-repurchase plan so that ordinary repurchase requests generally are no longer accepted, apart from limited death/disability and small-account circumstances. Starwood also reduced its monthly distribution.  SEC filing

As of September, the restriction remained in effect. SEC filings reported only permitted-category repurchases during July and August.  SEC filing

RREEF Property Trust

On September 15, 2026, the board of RREEF Property Trust approved a plan of complete liquidation and dissolution, subject to shareholder approval.  SEC filing

The company simultaneously suspended new share sales, its share-redemption plan, and its distribution-reinvestment plan.

RREEF is advised within the DWS organization, and DWS Distributors serves as its dealer manager. The eventual shareholder result will depend on asset-sale proceeds, liabilities, expenses, and the implementation of the liquidation plan—not simply the REIT’s most recently reported NAV.

Pacific Oak Strategic Opportunity REIT

Pacific Oak has disclosed significant current financial pressure, including a $553.2 million working-capital shortfall as of June 30, 2026, substantial near-term debt obligations, and going-concern uncertainty.  SEC financial disclosure

We are continuing to investigate both the underlying restructuring and the brokerage firms that sold its predecessor offerings.

Why the Brokerage Firm Matters

When an investment becomes impaired, an investor’s first instinct may be to focus entirely on the issuer.

But for many retail investors, another question deserves attention:

Who recommended the investment in the first place?

Brokerage firms and financial professionals may have obligations concerning product review, reasonable investigation, disclosure, and whether a recommendation is in a retail customer’s best interest.

Those obligations do not make brokerage firms guarantors of investment performance.

An investment’s subsequent decline does not establish that it was improperly recommended.

Likewise, the fact that a sponsor disclosed risks somewhere in a lengthy offering document does not necessarily answer every question about the recommendation made to a particular investor.

The analysis is transaction-specific.

At Iorio Law, our securities-arbitration practice focuses on disputes between investors and brokerage firms, financial advisors, and investment advisory firms. The firm represents investors nationwide and has substantial experience involving alternative investments, private placements, non-traded securities, and DSTs.  Iorio Law securities arbitration practice

How We Will Report Distress

The Distressed Securities Monitor will make several distinctions that are essential for investors.

A Declining NAV Is Not Necessarily a Realized Loss

An issuer’s estimated NAV may decline substantially, but the investor’s actual economic loss depends on purchase price, prior distributions, reinvestments, fees, and any ultimate sale or recovery.

A Tender Discount Is Not Automatically Fair Market Value

A company offering to repurchase shares substantially below its stated NAV creates an important price signal. But a limited issuer tender is not necessarily equivalent to an arm’s-length market value for the entire investment.

Redemption Restrictions Are Not the Same as Insolvency

BCRED and other private-credit vehicles may honor only part of requested withdrawals while maintaining substantial assets and borrowing capacity.

Investors can experience meaningful illiquidity without the fund being insolvent.

Distributions Are Not the Same as Investment Return

An investment can make substantial cash distributions while its NAV declines.

Investors should examine total return and the source of distributions, including whether payments are funded from investment income, asset sales, borrowings, offering proceeds, or return of capital.

A Dealer Manager Is Not Necessarily the Investor’s Selling Broker

The entity managing an offering’s distribution is not necessarily the financial professional or broker-dealer that recommended the investment to the individual investor.

Similarly, a custodian or clearing firm should not be treated as the seller merely because the investment appears on an account statement.

We will try to distinguish those roles throughout this series.

What Investors Should Preserve When an Investment Shows Warning Signs

Investors do not need to wait for bankruptcy before organizing their records.

If an investment has stopped making distributions, materially declined in value, restricted withdrawals, entered restructuring, or otherwise shown signs of distress, investors may want to preserve:

• monthly and quarterly brokerage statements;
• purchase confirmations;
• subscription agreements;
• private placement memoranda and prospectuses;
• financial-advisor emails and text messages;
• investment summaries or marketing materials;
• risk questionnaires and investment-profile documents;
• redemption or tender requests;
• issuer communications; and
• documents showing distributions received.

It is also useful to identify the exact legal name of the investment, share class, purchase date, amount invested, brokerage firm, and financial advisor.

Those details frequently determine which offering documents, financial events, and brokerage relationships are relevant.

What Comes Next

The Iorio Law Distressed Securities Monitor will be published regularly.

Weekly updates will identify new distress events and material developments in investments already being monitored.

Separate product-specific reports will examine significant investments in greater detail, including:

• offering history;
• financial performance;
• liquidity;
• distributions;
• debt and refinancing;
• regulatory developments;
• broker-dealer distribution; and
• issues individual investors may want to investigate.

Our research will emphasize primary materials whenever possible, including SEC filings, offering documents, bankruptcy records, regulatory filings, and issuer communications.

We also intend to report when conditions improve.

The purpose of the Monitor is not to predict failures. It is to identify and explain significant developments while they are unfolding.

That means asking the question before an investment becomes a widely recognized investor-loss case:

What investments are showing signs of meaningful impairment today, and what should the investors who own them understand about what is happening?

About Iorio Law PLLC

Iorio Law PLLC is a New York-based securities arbitration and investor advocacy law firm representing investors nationwide in disputes involving brokerage firms, financial advisors, and investment advisory firms.

The firm’s practice includes cases involving alternative investments, private placements, non-traded securities, Delaware Statutory Trusts, and other complex investment products.

Investors who have experienced substantial investment losses, suspended distributions, redemption restrictions, defaults, or other problems involving an investment recommended by a financial professional may contact Iorio Law PLLC at (646) 330-4624.

After years of waiting, many former GWG L Bond investors have finally begun receiving their first meaningful distribution from the GWG Wind Down Trust.

On July 1, 2026, the GWG Wind Down Trust announced a distribution of approximately 3.7 cents per Series A1 Wind Down Trust Interest, with payments commencing on July 14, 2026. The distribution stems primarily from litigation settlements obtained by the GWG Litigation Trust following GWG Holdings’ bankruptcy.

For many investors, the payment is a stark reminder of just how devastating the collapse of GWG Holdings has been.

While any recovery is welcome, the reality is that most GWG investors have recovered only a small fraction of their original investment and remain exposed to substantial losses.

More importantly, this distribution should serve as a wake-up call:

The bankruptcy process is not likely to make most investors whole.

For many investors, the best opportunity for meaningful recovery may still be through a FINRA arbitration claim against the brokerage firm or financial advisor that recommended the investment.

What Does the 3.7 Cents Distribution Mean?

When GWG Holdings filed for Chapter 11 bankruptcy protection in April 2022, approximately $1.6 billion in GWG L Bonds were outstanding. The bankruptcy plan became effective on August 1, 2023, and all GWG securities—including the L Bonds—were canceled and replaced with interests in the GWG Wind Down Trust.

Since then, investors have waited for the Trust to liquidate assets and pursue litigation claims.

The recent distribution is funded primarily by settlements reached by the GWG Litigation Trust. According to the Trust, the approved settlements are expected to result in a cumulative recovery of only a few cents on the dollar for former GWG bondholders.

Put differently:

For many retirees and conservative investors who were told these investments were suitable income-producing investments, these recoveries are devastatingly small.

The recent distribution also provides clarity regarding a question many investors have been asking for years: How much money am I likely to recover through the bankruptcy process?

For most investors, the answer is now clear—only a small percentage of their losses.

Why Many GWG Investors Have Pursued FINRA Arbitration Instead

The bankruptcy proceedings focus on recovering whatever value remains from GWG’s assets and litigation claims.

A FINRA arbitration claim is different.

Rather than pursuing GWG itself, FINRA arbitration claims seek compensation from the brokerage firms and financial advisors that recommended GWG L Bonds to investors.

These claims frequently allege that brokerage firms:

• Failed to conduct reasonable due diligence;
• Failed to disclose material risks;
• Recommended speculative and illiquid investments to conservative investors;
• Misrepresented the nature of the investment;
• Violated FINRA suitability obligations;
• Violated Regulation Best Interest (Reg BI); and
• Failed to supervise their registered representatives.

Many investors have already obtained settlements and arbitration awards through this process.

To date, August M. Iorio has recovered more than $4 million for GWG L Bond investors nationwide.

Visit our GWG L Bond Investor Recovery Center for more information.

We Recently Filed Another $1.2 Million GWG L Bond Arbitration Claim

Despite the recent bankruptcy distribution, investors continue to come forward.

In fact, Iorio Law PLLC recently filed a new FINRA arbitration claim on behalf of investors who suffered approximately $1.2 million in GWG L Bond losses.

The reason is simple:

For many investors, the bankruptcy distribution represents only a tiny percentage of their losses.

Investors who purchased GWG L Bonds through brokerage firms may still have viable claims against the firms that sold the product.

Many investors are now realizing that waiting for the bankruptcy process alone is unlikely to provide meaningful compensation.

It May Not Be Too Late—But Time Is Running Out

One of the most important issues facing GWG investors is timing.

Generally speaking, FINRA Rule 12206 contains a six-year eligibility rule that can bar claims if they are not filed within six years of the events giving rise to the dispute. As a result, many GWG investors who purchased bonds in 2019 and 2020 may be approaching critical deadlines.

Every situation is different, and the timing analysis can be complex. However, investors should not assume they have unlimited time to act.

The investors who wait until after all bankruptcy distributions have been completed may discover that their FINRA arbitration claims are no longer available.

That risk is one reason we continue to encourage GWG investors to evaluate their legal options now rather than later.

Recent FINRA Arbitration Results Continue to Favor GWG Investors

Investors often ask whether pursuing a FINRA arbitration claim is worthwhile.

The results speak for themselves.

To date, investors have obtained monetary awards in 17 of the 20 GWG L Bond arbitration cases that have proceeded to a final hearing. This represents an investor success rate of approximately 85%.

In addition, August M. Iorio has recovered more than $4 million for GWG L Bond investors through settlements and arbitration awards.

While every case is unique and past results do not guarantee future outcomes, these results demonstrate that brokerage firms can be held accountable when they fail to conduct adequate due diligence or recommend unsuitable investments.

Common Brokerage Firms That Sold GWG L Bonds

GWG L Bonds were sold through a nationwide network of brokerage firms, including:

• Emerson Equity LLC
• Centaurus Financial, Inc.
• Western International Securities, Inc.
• Aegis Capital Corp.
• Arete Wealth Management, LLC
• Great Point Capital LLC
• Coastal Equities, Inc. (now Realta Equities)
• Lifemark Securities Corp.
• Kingswood Capital Partners, LLC
• Newbridge Securities Corporation
• Moloney Securities Co., Inc.
• Dempsey Lord Smith, LLC

and numerous others.

If your financial advisor recommended GWG L Bonds through one of these firms, you may still have legal options available.

Don’t Let the Bankruptcy Recovery Be the End of the Story

Many GWG investors spent years waiting for the bankruptcy process to play out.

Now that distributions have begun, investors finally have a clearer picture of what the bankruptcy process is likely to deliver.

For most investors, the answer is disappointing.

A recovery measured in pennies on the dollar may not come close to addressing the losses suffered by retirees, families, and other investors who trusted their financial advisors.

The good news is that the bankruptcy process is not necessarily the only avenue for recovery.

Investors may still have the right to pursue claims against the brokerage firms and financial advisors that recommended these speculative, illiquid, high-risk investments.

However, those rights may not last forever.

Free GWG L Bond Case Evaluation

If you invested in GWG L Bonds and suffered losses, now is the time to determine whether you may have a FINRA arbitration claim.

Iorio Law PLLC represents investors nationwide on a contingency fee basis. There are no attorney’s fees unless we recover money for you.

Contact Iorio Law PLLC Today

August M. Iorio has recovered more than $4 million for GWG L Bond investors and nearly $100 million for investors nationwide.

Call: (646) 330-4624
Email: info@iorio.law

Schedule a Free Consultation Today

The bankruptcy distributions have begun.

The clock on potential arbitration claims may already be running.

Don’t wait until it is too late to explore your legal options.

The Court partially granted Defendants’ motion to dismiss. In plain English, the Court dismissed the fraud claims and several related claims. But the Court did not decide that Defendants did nothing wrong. Nor did the Court decide that no funds were misused or misappropriated.

Instead, the Court dismissed the fraud claims for a narrower legal reason: the Court found that the fraud claims overlapped with the breach-of-contract claims. In other words, the Court concluded that the same alleged misconduct—hiding DST syndication proceeds, diverting funds, and failing to repay the lender under the loan agreement—will still be addressed through the surviving contract claims.

This distinction is important for investors in Versity/Crew-sponsored Delaware Statutory Trusts, or DSTs.

The Court Did Not Clear Defendants of Misconduct

The Court’s ruling should not be read as a finding that Versity/Crew, Wettengel, Muro, or Nelson did not engage in misconduct.

Rather, the Court dismissed the fraud claims because, under New York law, a fraud claim may be dismissed when it is based on the same conduct as a breach-of-contract claim and does not involve a separate legal duty independent of the contract.

That is what happened here. The Court found that the alleged misrepresentations and alleged diversion of DST syndication proceeds were already part of the breach-of-contract theory.

As a result, the alleged misconduct remains very much at the center of the case.

Breach-of-Contract Claims Survived

Importantly, the Court allowed the breach-of-contract claims to proceed against several key defendants, including:

• Versity Invest/Crew Enterprises;
• Versity Investments;
• Blake Wettengel;
• Tanya Muro; and
• Brian Nelson.

Although those defendants were not the named borrower entities under the loan agreement, the Court found that the complaint adequately alleged, at this early stage, that they may be treated as alter egos of the borrowers, Versity EquityCo and Versity EquityCo II.

The Alter-Ego Allegations Remain Central

The Court found that the complaint sufficiently alleged that Versity Invest, Versity Investments, Wettengel, Muro, and Nelson acted together through various Versity-related entities to move DST syndication proceeds among themselves rather than using those funds to repay the lender.

The Court also noted allegations that corporate formalities were not respected and that allegedly diverted funds were used for personal or affiliated real-estate purchases, including:

• a $4.5 million residence in San Juan Capistrano, California; and
• two neighboring hotels in Anaheim, California purchased for a combined $20.6 million.

The Court further referenced allegations that more than $56 million in DST syndication proceeds were misappropriated instead of being paid to the lender.

These allegations have not been proven. But the Court found them sufficient, at the pleading stage, to allow the breach-of-contract and alter-ego claims to move forward.

Why This Matters to Versity/Crew DST Investors

This ruling is significant because many investors in Versity/Crew-sponsored DSTs have raised concerns about property performance, suspended distributions, sponsor risk, and the handling of investor funds.

The Court’s order does not decide whether Versity/Crew or its principals misappropriated money. But it confirms that allegations concerning the movement and use of DST syndication proceeds remain central to ongoing litigation.

For investors, the key takeaway is simple: the dismissal of the fraud claims does not mean the Court rejected the allegations of misconduct. The Court allowed core claims to proceed, including claims based on breach of contract and alter ego.

Iorio Law Is Investigating Versity/Crew DST Sales

Iorio Law PLLC is investigating the sale of DSTs sponsored by Versity Investments and Crew Enterprises, including:

• Vintage DST;
• Hayworth Tanglewood DST;
• One on 4th DST;
• The Walk DST;
• Apex South Creek DST; and
• other Versity/Crew-sponsored offerings.

Many investors purchased these products through broker-dealers and financial advisors who were required to conduct reasonable due diligence, understand the risks, and make recommendations that were in the investor’s best interest.

Investors may have potential claims if their broker-dealer failed to disclose material sponsor risks, failed to conduct adequate due diligence, or recommended an unsuitable DST investment.

Contact Iorio Law PLLC

If you invested in a Versity/Crew-sponsored DST and suffered losses, suspended distributions, or concerns about the handling of your investment, you may have legal options.

Iorio Law PLLC represents investors nationwide in securities arbitration claims against broker-dealers and financial firms.

If you invested in a Versity-sponsored DST, contact us today to review your legal rights.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Quick Summary (Investor Snapshot)

• Estimated Distribution: In the latest joint status report from the GWG Wind Down Trust and GWG Litigation Trust, the Litigation Trustee estimates that pending settlements, together with settlements already approved by the Bankruptcy Court, could collectively result in a distribution of approximately 3.78% to former GWG bondholders on account of their prepetition bond holdings.
• What This Means in Dollars: For every $100,000 invested, bondholders are estimated to receive just $3,780.

For most investors, this latest filing does not change the bigger picture: the GWG bankruptcy process is still unlikely to deliver meaningful compensation, and many investors should continue evaluating potential claims against the brokerage firms and financial advisors that sold GWG L Bonds.

What Should GWG L Bond Investors Do Now?

For many investors, the central legal question is no longer just what the bankruptcy case will pay.

It is whether the brokerage firm or financial advisor that sold the GWG L Bonds can be held accountable.

At Iorio Law PLLC, we have recovered more than $4 million for GWG L Bond clients on a contingency-fee basis (no recovery, no fee) by pursuing FINRA arbitration claims against the brokerage firms that recommended and sold these high-risk, illiquid securities.

GWG L Bonds were sold nationwide through brokerage firms that earned high commissions for recommending these illiquid, high-risk products. As our prior reporting and investigation page explain, firms involved in GWG L Bond sales had duties to:

• perform reasonable due diligence
• recommend only suitable investments
• disclose material risks and conflicts
• comply with best-interest obligations

Many investors were retirees or conservative investors seeking income. If they were sold GWG L Bonds as safe, appropriate, or income-producing without adequate risk disclosure, they may have viable claims through FINRA arbitration.

We outline these issues in detail in our GWG L Bond Investor Recovery Center.

Those claims are separate from the bankruptcy case.

That distinction is important.

A bankruptcy distribution does not prevent an investor from pursuing a claim against the broker-dealer or advisor that sold the investment.

Why Investors Should Not Wait

The newest status report may lead some investors to think they should simply wait for a bankruptcy check and move on.

That could be a mistake.

A projected 3.78% distribution is still a very small recovery. And waiting on the bankruptcy process does not necessarily stop the clock on potential legal claims against brokerage firms.

If you purchased GWG L Bonds through a financial advisor or broker-dealer, now is the time to review:

• when the bonds were purchased
• what representations were made
• whether GWG’s business model change was sufficiently and accurately disclosed
• whether liquidity, concentration, and issuer risk were fully explained
• whether the recommendation was suitable for your age, objectives, and risk tolerance
• which firm and registered representative were involved

Contact Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered more than $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Western International Securities, Centaurus Financial, Emerson Equity, Aegis Capital Corp., Arete Wealth Management, Ausdal Financial Partners, or Kingswood Capital— or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Frequently Asked Questions

What is the latest estimated recovery for GWG L Bond investors?

According to the latest joint status report, the Litigation Trustee estimates that pending settlements together with already approved settlements could result in a distribution of approximately 3.78% to former GWG bondholders, or about $3,780 per $100,000 invested.

Is 3.78% the final GWG bankruptcy payout?

Not necessarily. The report describes this as an estimate based on current assumptions and pending matters. Actual distributions may be higher or lower.

When will GWG L Bond investors receive distributions?

The timing remains uncertain. The report indicates that additional settlement approvals and other unresolved issues still affect the distribution process.

Can GWG investors still pursue claims outside the bankruptcy?

Yes. In many cases, investors may still be able to pursue claims against the brokerage firms or financial advisors that sold GWG L Bonds through FINRA arbitration.

Why are so many GWG investors looking at FINRA arbitration?

Because bankruptcy recovery appears very limited, many investors are evaluating whether their brokers failed to perform due diligence, failed to disclose material risks, or made unsuitable recommendations.

If you invested in this property, you were likely sold on the promise of a “stable,” “income-producing,” and “tax-advantaged” replacement property. However, recent data reveals a different reality.

Iorio Law PLLC is actively investigating One on 4th DST as part of our broader investigation into Versity/Crew Enterprises DSTs. Investor outcomes depend heavily on truthful disclosures and broker-dealer due diligence. When those fail, investors have the right to seek financial recovery.

What’s New: Q4 2025 Results Show Meaningful Losses

The Sponsor’s Q4 2025 investor update paints a concerning picture of the property’s financial health. For the fourth quarter of 2025:

• One on 4th LeaseCo, LLC reported a net loss of ($292,008).
• The Trust reported a net loss of ($1,673,262).

These losses are significant. DST investors typically rely on the Trust’s net cash flow (or reserve usage) for regular distributions and principal preservation. When a Trust runs deep quarterly losses, investors face heightened risks of continued distribution suspensions, further asset deterioration, and potential forced restructuring.

“Strong Occupancy” Does Not Guarantee Investor Safety

The Q4 2025 update notes that the property ended the quarter at 98.9% occupancy and describes the asset as “stabilized.” However, the update also acknowledges that operating performance remains heavily pressured by elevated costs—particularly property taxes, insurance, and utilities—which remain consistently above initial underwriting assumptions.

The bottom line: High occupancy does not equal sustainable distributable cash flow. For DST investors, success requires sufficient cash flow after debt service, taxes, insurance, property management costs, and other hidden charges.

Why the DST Structure Matters: Master Leases and the Fee Stack

One on 4th DST utilizes a master lease structure. The Trust leases the property to an affiliate (One on 4th LeaseCo, LLC), and another affiliate entity serves as the property manager. Affiliate-driven structures can create inherent conflicts of interest and severely reduce transparency, leaving investors dependent on sponsor-controlled reporting across multiple related entities.

Furthermore, this offering carried a massive upfront selling-cost and fee structure. The Private Placement Memorandum (PPM) notes that WealthForge Securities, LLC served as the exclusive managing broker-dealer. Selling commissions and expenses were capped at a staggering 9.33% (including selling commissions, dealer management fees, broker-dealer allowances, wholesaling fees, and offering expenses).

High-commission alternative investments often create dangerous incentives for:

• Aggressive sales practices.
• Incomplete discussions regarding risk and liquidity.
• “Rubber-stamp” due diligence by broker-dealers who ignore sponsor red flags.

Broker-Dealer Liability: Investigating One on 4th DST Sales

Over the past several years, One on 4th DST and other Versity/Crew-sponsored investments have reportedly experienced loan defaults, declining occupancy, significant accounts payable, suspended distributions, and a distinct lack of investor communication.

When transparency disappears, we ask the critical questions: Where did the offering proceeds actually go? Were reserve accounts properly maintained? Were related-party payments fully disclosed?

The Crux of the Claims: A Missed 2020 Fraud Lawsuit

At the heart of the claims against the selling broker-dealers is a glaring failure of due diligence, disclosure, and supervision.

Specifically, our investigation focuses on the failure of brokerage firms to detect and disclose that the principals of Versity/Crew, Blake Wettengel and Tanya Muro, were named as defendants in a lawsuit filed in November 2020. This lawsuit contained severe allegations that the principals defrauded investors by misappropriating syndicated funds for their own personal benefit.

For a broker-dealer, uncovering a prior fraud and misappropriation lawsuit against a sponsor’s principals is “Due Diligence 101.” Recommending a high-risk, illiquid DST like One on 4th without disclosing this massive red flag to retail investors represents a severe potential breach of regulatory obligations.

Reg BI, Suitability, and Failure to Supervise

Through FINRA arbitration, One on 4th DST investors may have strong claims against the brokerage firms that sold them these investments. Potential claims include:

• Failure to conduct reasonable due diligence into sponsor controls, related-party transactions, and prior litigation involving the sponsor’s principals.
• Misrepresentations and omissions regarding the safety, distribution risks, and the true track record of the sponsor.
• Regulation Best Interest (Reg BI) and Suitability violations, including over-concentrating investor portfolios in highly illiquid alternative investments.
• Failure to supervise brokers who aggressively marketed DSTs as “safe” or “stable” while downplaying or entirely omitting known structural risks and legal red flags.

“Bridge Equity” and Structural Risks

Additionally, the PPM describes the use of “bridge equity” to close the acquisition before sufficient DST interests were actually sold. It contains warnings that, in certain default scenarios, proceeds from the sale of DST interests could be demanded to satisfy obligations not directly tied to the property. Many retail investors were never meaningfully warned about this proceeds-flow risk.

Practical Next Steps for One on 4th DST Investors

If you invested in One on 4th DST and are currently dealing with suspended distributions or limited communications, it is time to protect your legal rights.

1. Gather Your Documents: Locate your subscription paperwork, the PPM, investor reports, email correspondence with your advisor, and account statements.
2. Identify the Seller: Note the specific advisor who recommended the investment and the broker-dealer firm they were registered with at the time of the sale.
3. Evaluate FINRA Arbitration Options: In many DST fraud and negligence cases, financial recovery is pursued directly against the selling broker-dealer. Brokerage firms carry meaningful insurance and represent a collectible source of recovery.

Contact Iorio Law PLLC Today

Iorio Law PLLC is actively investigating financial losses connected to Versity/Crew-sponsored DSTs, including One on 4th DST. If you are concerned about your suspended distributions, the lack of transparency, or the safety of your principal investment, we can evaluate whether a FINRA arbitration claim is appropriate for you.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

If you are searching for information on “Versity Income Property Notes,” “VIP Notes,” “Versity Invest, LLC,” “Versity II,” or “Crew Enterprises” because your monthly interest payments unexpectedly stopped in April 2025, you are not alone.

Iorio Law PLLC dozens of represents investors nationwide in FINRA arbitration claims against broker-dealers that sold high-risk private placements and alternative investments. We are actively investigating the sale of VIP Notes through multiple broker-dealers, including:

• WealthForge Securities, LLC (Managing Broker-Dealer / Dealer-Manager)
• Great Point Capital, LLC
• Capulent LLC
• A.G.P. / Alliance Global Partners

If your VIP Notes were recommended and sold through any of these firms, or another FINRA member, this guide explains what VIP Notes are, the red flags surrounding the issuer, and why your broker-dealer may be legally responsible for your investment losses.

What are VIP Notes?

VIP Notes are a Regulation D (Rule 506(b)) private placement consisting of 24-month unsecured notes. The offering documents described the VIP Notes as an “income” investment designed to pay monthly interest. However, the central risk of this investment is extreme issuer credit risk.

When payments stop, investors usually learn the hard truth about private placement debt: a “note” of this type behaves less like a traditional secure bond and more like a highly speculative, unsecured loan to a private business.

The Key Legal Issue: Broker-Dealer Liability

Many investors mistakenly assume that if an issuer defaults, the invested capital is simply gone. In a FINRA arbitration claim, the legal focus shifts to whether the broker-dealer and the individual broker complied with their strict regulatory duties at the time of the recommendation and sale.

Broker-dealers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) and state and federal securities laws. To satisfy these obligations, firms must conduct:

• Reasonable Investigation: Broker-dealers must perform independent due diligence on the security and the issuer, which is especially critical for Regulation D private placements.
• Accurately Disclose Material Information: Broker-dealers and brokers must accurately disclose all material information about the security and  the issuer.
• Care Obligation: Brokers must exercise reasonable diligence, care, and skill to ensure the recommendation is in the retail customer’s best interest.
• Fair and Balanced Disclosure: Firms must disclose all material risks, red flags, and conflicts of interest.
• Supervision: Brokerages must implement and maintain supervisory systems designed to prevent unsuitable or misleading sales practices.

FINRA has long warned that complex, illiquid, “non-conventional” products require heightened diligence, supervision, and training. Regulatory Notice 23-08 reiterates that when recommending privately offered securities, firms should reasonably investigate the issuer and management, business prospects, assets, claims being made, and the use of proceeds.

Missed Red Flags: Why Diligence Mattered for VIP Notes

Because VIP Notes are unsecured issuer debt, a broker-dealer’s due diligence cannot stop at marketing language or a glossy pitch deck. According to recent arbitration filings, multiple lawsuits and arbitrations publicly alleged that Versity’s principals diverted and misappropriated syndicated investor funds for personal benefit well before many VIP Notes were sold.

A reasonably diligent broker-dealer evaluating this offering should have investigated:

• Whether the principals of the issuer were previously alleged to have defrauded investors.
• Whether the issuer had the actual financial capacity and liquidity to pay monthly interest and return principal at maturity.
• Whether the stated “repayment sources” (such as syndication and disposition revenue) were reliable.
• Whether offering proceeds were adequately controlled and safeguarded from diversion.
• Whether the serious public allegations of fraud and fund misappropriation against the issuer’s principals disqualified the product from being recommended to retail investors.

If your broker recommended these Notes as “safe” income while minimizing material risks—or failing to disclose the severe litigation history of the issuer’s principals which included allegations of defrauding investors—that failure can support claims for Reg BI violations, negligent misrepresentation, unsuitability, and failure to supervise.

The Role of the Broker-Dealer in VIP Notes Sales

Investors searching for recovery options often look up the specific broker-dealer that sold them the investment. Every firm involved had a duty to ensure recommendations were made only after meaningful diligence.

WealthForge Securities, LLC (Dealer-Manager)

When a firm serves as a dealer-manager (or “managing broker-dealer”) for a private placement, its gatekeeping role is central. WealthForge received significant compensation for this offering, including a 6% selling commission, a 0.65% dealer management fee, and a 1% broker-dealer allowance specifically tied to its due diligence review. This role typically involves product approval, structuring, and setting the supervisory systems governing how the product can be sold.

Selling Broker-Dealers (Great Point Capital, Capulent, A.G.P.)

Even if a firm was not the dealer-manager, it must satisfy the exact same core obligations when recommending and selling a private placement to a retail customer. They must independently understand the product, conduct a reasonable investigation, evaluate suitability, disclose conflicts, and supervise their representatives’ communications.

Common FINRA Arbitration Claims for VIP Notes Investors

While every case is fact-specific, VIP Notes disputes commonly include the following claims:

• Reg BI (Care Obligation) Violations: The recommendation was not in the investor’s best interest, and the firm performed inadequate diligence on the issuer’s debt risk.
• Unsuitability and Concentration: An illiquid, high-risk private placement was inappropriately sold to conservative or retirement-focused investors seeking capital preservation.
• Misrepresentation and Omission: The broker minimized default risk, liquidity limits, the unsecured status of the notes, and the severe litigation history of the issuer’s management.
• Failure to Supervise: The brokerage firm exhibited inadequate product approval, training, and oversight for private placement sales.

Red Flags Checklist: Signs Your Broker May Be Liable

You may have a strong case for FINRA arbitration if any of the following apply to your situation:

• You were told VIP Notes were “safe,” “stable,” “bond-like,” or a conservative income product.
• You were not clearly informed that the Notes were unsecured and highly illiquid.
• You were assured your principal would be returned at maturity without a serious discussion regarding default risk.
• VIP Notes made up a disproportionately large percentage of your investable assets or retirement funds.
• The broker downplayed or completely failed to disclose material lawsuits and concerns regarding the issuer’s management and financial condition.

Act Quickly to Protect Your Rights

FINRA generally applies a six-year eligibility rule measured from the occurrence or event giving rise to the claim, and broker-dealers may also assert various state statutes of limitation. With payments having stopped in April 2025, delaying action can weaken your evidentiary position and leverage.

If you own VIP Notes, immediately collect your account statements showing the purchase, your subscription agreement, the PPM, any pitch decks, and all written communications with your broker.

How Iorio Law PLLC Can Help VIP Notes Investors

Iorio Law PLLC represents investors nationwide in FINRA arbitration claims involving illiquid alternative investments, including Versity and Crew Enterprises-related offerings.

If your VIP Notes were sold through WealthForge Securities, Great Point Capital, Capulent, or A.G.P. / Alliance Global Partners, we can evaluate whether your broker-dealer complied with its due diligence, disclosure, and best-interest obligations—and pursue recovery through FINRA arbitration where appropriate.

For more information on our related investigations, please visit our Delaware Statutory Trusts (DSTs) Investigation Page.

Next Step: Contact us today. Send us your trade confirmation or account statement showing the VIP Notes purchase, along with any emails or pitch materials from your broker, for a comprehensive case evaluation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

If you invested in a Delaware Statutory Trust (DST) and recently learned that the sponsor or property entity has filed for bankruptcy, you are not alone. Over the past several years, numerous real estate DST programs have collapsed due to rising interest rates, operational failures, refinancing defaults, sponsor mismanagement, and fraud.

As investors in Delaware Statutory Trusts (DSTs), many of you turn to these vehicles for their tax advantages, such as 1031 exchanges, and potential steady income from real estate holdings like senior living facilities. But what happens when your DST sponsor, like Inspired Healthcare Capital Holdings, LLC, files for Chapter 11 bankruptcy?

The bankruptcy filing can feel overwhelming—but it does not mean your legal options are over. In many cases, bankruptcy is only the beginning of the recovery process.

Here’s what every DST investor needs to know.

What Does Bankruptcy Mean for DST Investors?

When a DST files for Chapter 11, it aims to reorganize debts while continuing operations. However, this can significantly impact investors:

• Automatic Stay: The bankruptcy halts collections, foreclosures, or lawsuits against the debtor, protecting assets but potentially delaying distributions to investors.
• Creditor Status: As a beneficial owner in the DST, you may be treated as an unsecured creditor, meaning recoveries depend on the reorganization plan. Funds available for distribution could be limited after administrative expenses and secured debts are paid.
• Potential Outcomes:
  • Reorganization: The DST might emerge stronger, but with diluted investor interests.
  • Liquidation: Assets like senior living properties could be sold, leading to partial recoveries.
  • No Recovery: In worst-case scenarios, unsecured creditors receive nothing.

This does not automatically eliminate investor rights. Instead, bankruptcy often confirms what many investors already suspected:

• The investment failed to perform as promised
• Distributions stopped or were artificially supported
• Refinancing assumptions were unrealistic
• Risk disclosures were downplayed or misrepresented

Most importantly, the bankruptcy filing frequently triggers investigation into how the DST was sold in the first place.

Your Options: Beyond Waiting on Bankruptcy Court

Many investors assume they must wait in bankruptcy court. That is often a mistake.

Bankruptcy Recovery (Sponsor Side)

Participating in the bankruptcy as a creditor is one route—file a proof of claim, attend hearings, or join a creditors’ committee. Bankruptcy cases typically involve:

• Senior lenders
• Secured creditors
• Trade vendors
• Internal restructuring

DST investors often receive little to no recovery because they sit at the bottom of the capital stack.

A more proactive option? Holding your broker or financial advisor accountable through FINRA arbitration.

FINRA Arbitration (Broker Liability)

Brokers and advisors have a duty to recommend suitable investments, conduct due diligence, and disclose risks. In DST cases like those from Inspired Healthcare Capital, common issues include:

• Unsuitability: Recommending high-risk DSTs to conservative investors seeking stable income or tax deferral.
• Misrepresentations: Downplaying risks such as illiquidity, market volatility in senior living, or sponsor financial instability.
• Omissions: Failing to disclose material information, such as sponsor risk or prior sponsor misconduct.   
• Failure to Disclose Conflicts: Not revealing conflicts of interest, like commissions from selling DST interests, or inadequate vetting of the sponsor.
• Breach of Fiduciary Duty: Advisors must act in your best interest; failing to monitor the investment post-purchase could be grounds for a claim.

FINRA arbitration is a streamlined, cost-effective alternative to court, often resolving in 12-18 months. Successful claims can recover principal losses, lost income, legal fees, and punitive damages. Unlike bankruptcy, arbitration targets the brokerage firm, which may have deeper pockets.

Your claim is against the brokerage firm and financial advisor, not the bankrupt sponsor.

This is where meaningful recoveries frequently occur.

You can, and often should, pursue both avenues of recovery.

Key Steps to File a FINRA Claim

1. Gather Documentation: Subscription agreements, closing statements, investor updates, account statements, and communications with your advisor.
2. Assess Statute of Limitations: FINRA claims generally must be filed within six years of the purchase or discovery of the issue.
3. Consult a Specialist: Work with a securities arbitration firm like Iorio Law PLLC to evaluate your case. We’re currently reviewing Inspired Healthcare Capital DSTs and Versity Investments, LLC / Crew Enterprises, LLC-sponsored DSTs for potential claims.
4. File the Statement of Claim: Detail the misconduct and damages sought.

In recent similar cases, investors have recovered millions from brokers for unsuitable real estate securities. With Inspired’s bankruptcy fresh, now is the time to act before evidence fades or limitations expire.

Timing Matters: FINRA Eligibility Deadlines

FINRA imposes strict filing deadlines:

• Generally six years from the date of purchase
• Shorter deadlines may apply depending on state law claims

If your DST was purchased in 2019–2021, your eligibility window may already be closing.

Waiting for bankruptcy resolution can permanently destroy your right to recover from the brokerage firm.

Case Study: Inspired Healthcare Capital’s Filings Highlight Risks

Investors should be aware that Inspired Healthcare Capital (IHC) and its affiliates have officially filed for Chapter 11 bankruptcy protection in the Northern District of Texas. This legal action covers not only IHC but also its affiliated Delaware Statutory Trusts (DSTs) and private placement funds. The filings confirm serious financial woes: distributions have been suspended, capital raises halted, and concerns regarding solvency and transparency are mounting. If your portfolio includes these assets, your capital is at heightened risk. The following IHC entities have filed for protection:

• Inspired Senior Living of Appleton DST
• Inspired Senior Living of Arlington Heights DST
• IHC Ashbrook DST
• Inspired Senior Living of Athens DST
• Inspired Senior Living of Augusta DST
• Inspired Senior Living of Brookhaven DST
• Inspired Senior Living of Carson Valley DST
• IHC – Candle Light Cove DST
• Inspired Senior Living of Chesterfield DST
• Inspired Senior Living of Dartmouth DST
• Inspired Senior Living of Delray Beach DST
• Inspired Senior Living of Dunedin DST
• Inspired Senior Living of Eatonton DST
• Inspired Senior Living of Eugene DST
• Inspired Senior Living of Fort Myers DST
• Inspired Senior Living of Grapevine DST
• Inspired Senior Living of Hamilton DST
• Inspired Senior Living of Lake Orion DST
• Inspired Senior Living of Largo DST
• Inspired Senior Living of Las Vegas DST
• Inspired Senior Living of Melbourne DST
• Inspired Senior Living of Mequon DST
• Inspired Senior Living of Naperville DST
• Inspired Senior Living of New Braunfels DST
• Inspired Senior Living of North Haven DST
• IHC – Peachtree DST
• Inspired Senior Living of Pinellas Park DST
• Inspired Senior Living of Reno DST
• Inspired Senior Living of Round Rock DST
• Inspired Senior Living of San Marcos DST
• Inspired Senior Living of St. Petersburg DST
• Inspired Healthcare Capital Income Fund LLC
• Inspired Healthcare Capital Income Fund 2 LLC
• Inspired Healthcare Capital Income Fund 3 LLC
• Inspired Healthcare Capital Income Fund 5, LLC
• Inspired Healthcare Capital Income Fund 5 Notes, LLC
• Inspired Healthcare Capital Liquidity Fund, LLC
• Inspired Healthcare Capital Fund LP
• IHC Security Income Fund LLC
• IHC Development Fund III, LLC
• IHC Development Fund IV, LLC

Iorio Law PLLC is investigating the sales practices and due diligence of Emerson Equity LLC; Berthel, Fisher & Company Financial Services, Inc.; Newbridge Securities Corporation; Landolt Securities, Inc.; Dempsey Lord Smith LLC; and KCD Financial Inc. in recommending and selling these risky securities.

Case Study: Versity Investment and Crew Enterprise DSTs

Iorio Law PLLC is representing individuals who have approximately $25 million in beneficial interests in various DSTs sponsored by Versity Investments, LLC and/or Crew Enterprises, LLC (formerly Versity Invest, LLC), including:

• Hayworth Tanglewood, DST
• One on 4^th DST
• Apex South Creek, DST
• Vintage, DST
• The Walk, DST
• The Element, DST
• Wolf Run, DST
• 4^th & J, DST
• Oakbrook, DST
• Tailor Lofts, DST  
• Shadowglen, DST
• The Nine, DST
• Campus Walk, DST

In addition, we are representing investors who own other securities issued by Versity, including:

• Versity Income Property Notes
• Versity Income Fund I, LLC
• Versity Income Fund II, LLC
• The Ridge TIC
• AW Provo Evolution, LLC
• University Park Berkeley, LLC

Iorio Law PLLC is investigating whether broker-dealers such as Great Point Capital, LLC, Coastal Equities, Inc. (now Realta Equities, Inc.), Capulent LLC, Cabin Securities, Inc., Aurora Securities disclosed to investors that the principals of the Sponsor had previously been alleged to have defrauded investors by diverting and misappropriating syndicated funds from DSTs.  

You Are Not Alone

At Iorio Law PLLC, we represent DST investors nationwide whose financial assets and savings were placed into unsuitable real estate programs. We focus exclusively on investor recovery and securities arbitration.

If your DST has filed for bankruptcy and you are wondering what comes next, now is the time to act.

Protect Your Investment Today

Speak With a DST Arbitration Attorney

If you invested in a DST that is now in bankruptcy and want to explore your recovery options:

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Current filings, arbitration claims, and sponsor disclosures point to serious financial irregularities, including misappropriation of funds, suspended distributions, and significant due diligence failures by the broker-dealers who sold these high-risk investments.

These developments are part of a growing series of Versity Investments lawsuits and Crew Enterprises lawsuit updates involving multiple DST offerings nationwide.

Investor Alert: If you invested in Hayworth Tanglewood DST or other Versity-sponsored offerings, your recovery window may be limited. Contact Iorio Law PLLC immediately for a case evaluation.

Property Profile: What is Hayworth Tanglewood DST?

Hayworth Tanglewood DST is a Delaware Statutory Trust formed to acquire a Class A, mid-rise multifamily residential property located in Houston, Texas. 

According to the offering documents:

• Property Type: Class A mid-rise multifamily community
• Property Address: 1414 Wood Hollow Drive, Houston, Texas 77057
• Units: 246 residential units
• Net Rentable Area: Approximately 351,000 square feet
• Site Size: Approximately 3.08 acres
• Occupancy at Acquisition: Approximately 94% leased
• Acquisition Date: June 30, 2022
• Purchase Price: $105.5 million
• Loan Amount: $48 million
• Offering Date: July 27, 2022
• Total Equity Raised: $76,767,365
• Total Offering Price: $124,767,365
• Loan-to-Offering Price Ratio: Approximately 38.47%
• Sponsor: Versity Invest, LLC

The offering was marketed aggressively to 1031 exchange investors.

Why Is Hayworth Tanglewood DST Under Investigation?

The investigation focuses on allegations that the sponsors—specifically principals Blake Wettengel and Tanya Muro—engaged in misconduct that jeopardized investor capital. Furthermore, the broker-dealers who recommended these products may have failed their regulatory duties to vet the sponsors before selling the DSTs to retirees and accredited investors.

Key Allegations and Red Flags:

• Suspended Distributions: Investors have reported halted monthly distributions, a primary indicator of cash flow distress and potential foreclosure risk.
• Misappropriation of Funds: Civil litigation alleges that syndicated investor proceeds were diverted, commingled with other property funds, or used for unauthorized bonuses and personal expenditures.
• Declining Valuation: Market reports in 2025 suggest the property value has fallen below the 2022 acquisition price.
• Prior Knowledge: Public lawsuits filed as early as 2020 alleged similar misconduct by the same principals, raising questions about why broker-dealers continued to sell these products in 2022 and/or fail to disclose the allegations.

The Role of Broker-Dealers: Liability for Due Diligence and Disclosure Failures

Investment firms are not merely order takers; they are gatekeepers. Under Regulation Best Interest (Reg BI) and FINRA Rule 2111, broker-dealers have a duty to conduct reasonable due diligence.

Further, under federal and state securities laws, they have a duty to disclose all material information and not to misrepresent any material information.

Selling Firms

Upon information and belief, the following FINRA-member firms sold Hayworth Tanglewood DST:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC (now Realta Equities, Inc.)
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• Westpark Capital, Inc.

The PPM identifies WealthForge Securities, LLC as the exclusive managing broker-dealer, with authority to re-allow commissions to participating selling firms.

Broker-dealers received:

• 6.0% selling commissions
• 0.65% dealer management fees
• 1.0% broker-dealer allowance
• Additional wholesaling compensation

Total upfront selling compensation and offering expenses could exceed 9%.  The high sales commissions and fees can have a negative impact on the profitability of the property and the DST structure.

Potential Violations

Iorio Law is investigating whether these firms:

1. Ignored Red Flags: Failed to investigate the litigation history of Wettengel and Muro (Versity/Crew principals).
2. Disclosure Failures: Failed to disclose to investors that the principals of Versity/Crew, Wettengel and Muro, were previously alleged to have defrauded investors by diverting their funds away from the properties being purchase for syndication and used for undisclosed and improper purposes.
3. Overlooked Conflicts: Failed to analyze sponsor structure and conflicts of interest that involved the principals owning the management company and other affiliated entities, which allowed them to allegedly divert money away from the property.
4. Unsuitable Recommendations: Sold illiquid, high-risk DSTs to conservative investors, retirees, or those requiring stable income.

Sponsor Structure: Conflicts of Interest

The Hayworth Tanglewood offering documents (PPM) reveal a complex web of affiliate-controlled entities designed to extract fees regardless of property performance.

• Asset Management Fees: 1.0% of gross revenue to Versity.
• Property Management Fees: 2.5% of monthly gross revenue to Book and Ladder, LLC (affiliate).
• Bonus Rent: The “Master Tenant” (affiliate) participated in operating income.

These arrangements were not negotiated at arm’s length, creating a direct conflict between the sponsor’s desire for fees and the investors’ need for returns.

Allegations of Misappropriation by Versity, Crew Enterprises, Wettengel, and Muro

Arbitration filings and civil litigation allege that Blake Wettengel and Tanya Muro, principals of Versity Investments and later Crew Enterprises, engaged in:

• Diversion of syndicated investor proceeds
• Commingling of property funds
• Unauthorized transfers
• Payment of improper bonuses
• Use of DST capital for unrelated investments and personal expenditures

Importantly, these allegations pre-date the Hayworth offering. Public lawsuits filed in November 2020, and June 2021 alleged substantially similar misconduct involving the same principals and DST syndication structures.

Hayworth Tanglewood Performance Issues and Distribution Suspensions

According to investor claims and sponsor communications:

• Hayworth Tanglewood DST has experienced declining occupancy levels
• Distributions have been suspended for extended periods
• Sponsor communications regarding property performance have been limited
• Market valuations in 2025 reportedly reflected values below the 2022 acquisition price

Suspended distributions are often a warning sign of deteriorating cash flow and heightened foreclosure risk in leveraged DST structures.

What Hayworth Tanglewood Investors Should Do Now

If you invested in Hayworth Tanglewood DST or any Versity-sponsored DST, you may have claims for:

• Violation of Regulation Best Interest (Reg BI) (including failure to conduct reasonable due diligence)
• Material Misrepresentations and Omissions
• Breach of Fiduciary Duty
• Negligence and Failure to Supervise

These claims are typically pursued through FINRA arbitration, which allows investors to seek recovery directly from broker-dealers — even when sponsors face insolvency.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide. We specialize in recovering losses from unsuitable alternative investments and broker-dealer misconduct.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

No recovery, no fee. Contact us today to review your legal options.

• GWG Bankruptcy Settlements Approved: Wind Down Trust to Pay Pennies on the Dollar — Investors Must Act Now (January 2026) (January 19, 2026)

Original Post:

On January 13, 2026, the United States District Court for the Northern District of Texas approved a series of settlements pursued by the GWG Litigation Trustees. These settlements clear the path for distributions from the GWG Wind Down Trust—but the outcome is devastating for investors.

The reality is stark: GWG L Bond investors are expected to recover only pennies on the dollar through the bankruptcy process.

The Numbers Are In: Expected Recovery Is Just 2.694% – 3.446%

As we have previously reported, the approved settlements translate into projected distributions of approximately 2.694% to 3.446% of invested capital. In practical terms:

• A $100,000 GWG L Bond investment may yield $2,700–$3,400
• A $250,000 investment may return $6,700–$8,600
• A $500,000 investment may recover $13,500–$17,000

For many retirees and conservative investors who were told these bonds were “safe” or “income-producing,” these numbers are devastating—and underscore just how little the bankruptcy process offers as a path to meaningful recovery.

You can read our prior analysis here: GWG L Bonds Update – November 2025

Why the Bankruptcy Process Fails GWG L Bond Investors

The bankruptcy of GWG Holdings, Inc. was never designed to make investors whole. Bankruptcy distributions are limited to whatever remains after asset sales, litigation recoveries, and administrative expenses.

Importantly, the bankruptcy does not prevent investors from pursuing claims against brokerage firms and financial advisors who sold GWG L Bonds in violation of securities laws and FINRA rules.

In fact, for most investors, FINRA arbitration is the only realistic path to recovering a meaningful portion of their losses.

FINRA Arbitration: The Primary Path to Recovery

GWG L Bonds were sold nationwide through brokerage firms that earned substantial commissions—often as high as 7–8%—for recommending these illiquid, high-risk bonds to retail investors. These firms included Western International Securities, Centaurus Financial, Emerson Equity, Aegis Capital Corp., Arete Wealth Management, and Ausdal Financial Partners.

Brokerage firms and financial advisors had legal duties to:

• Conduct reasonable due diligence on GWG and the L Bonds
• Recommend only suitable investments consistent with an investor’s objectives and risk tolerance
• Disclose all material risks, conflicts of interest, and liquidity limitations
• Act in the customer’s best interest under Regulation Best Interest

When those duties were breached, investors may pursue claims through Financial Industry Regulatory Authority (FINRA) arbitration—separate and apart from the bankruptcy case.

Why Time Matters: Statutes of Limitation Are Running

FINRA arbitration claims are subject to strict time limits, generally requiring that claims be filed within six years of the investment transaction. Many GWG L Bond purchases occurred between 2018 and 2020, meaning the window to file claims is closing or has already begun to close for some investors.

Waiting for a nominal bankruptcy distribution does not stop the clock.

Our Firm’s Ongoing GWG L Bond Investigation

At Iorio Law PLLC, we have been investigating the sale of GWG L Bonds for years and have already recovered more than $4 million for GWG investors nationwide through FINRA arbitration claims.

Our investigation focuses on:

• Unsuitable recommendations to conservative or income-oriented investors
• Misrepresentations and omissions regarding risk, liquidity, and GWG’s business model
• Failures by brokerage firms to conduct adequate due diligence
• Conflicts of interest driven by high commissions

We outline these issues in detail in our GWG L Bond Investor Recovery Center, which you can access here:
GWG L Bond Investor Recovery Center

Bankruptcy Is Not the End — It’s the Wake-Up Call

The January 13, 2026 court approval confirms what many investors feared: the GWG bankruptcy will not provide meaningful recovery.

For investors who purchased GWG L Bonds through a brokerage firm or financial advisor, FINRA arbitration remains the most effective tool to pursue accountability and financial recovery.

Take Action Now

If you invested in GWG L Bonds, now is the time to act:

• Do not assume the bankruptcy distribution is your only recovery
• Do not wait until statutes of limitation expire
• Do not assume your broker “did nothing wrong”

Contact Iorio Law PLLC for a free, confidential consultation to evaluate whether you have viable FINRA arbitration claims.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing GWG L Bond Investors Nationwide
🖊️ Free Case Review: Contact Form

Most recently, Kingswood Capital Partners, LLC has been hit with significant sanctions for its failure to monitor the sale of these high-risk products.

If you’ve suffered losses in GWG L Bonds, visit our firm’s GWG L Bond Recovery Center to learn more and explore your potential legal options.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020068830202 (Kingswood Capital Partners, LLC)

On Friday, December 12, 2025, the Financial Industry Regulatory Authority (FINRA) finalized a Letter of Acceptance, Waiver, and Consent (AWC No. 2020068830202) regarding Kingswood Capital Partners, LLC related to the sale of GWG L Bonds. Without admitting or denying the findings, Kingswood consented to a censure and a $150,000 fine.

FINRA found that between March 2019 and June 2019, Kingswood Capital failed to reasonably supervise a former registered representative who recommended GWG L Bonds and other illiquid alternative investments to senior investors.

FINRA’s findings detailed alarming cases of unsuitable recommendations and overconcentration:

• The 81-Year-Old Investor: A Kingswood representative recommended an 81-year-old client invest $96,000 into GWG L Bonds, despite the client having an annual income of less than $50,000. This single investment resulted in an astounding 96% of the client’s liquid net worth being concentrated in a high-risk, illiquid product.
• The 66-Year-Old Investor: In a similar case, the representative recommended an $88,000 investment in GWG L Bonds to a 66-year-old client with a moderate risk tolerance. This placed over 35% of the client’s liquid net worth into a single speculative product.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor) by failing to maintain a supervisory system designed to prevent such extreme concentration in illiquid products.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor and principles of trade) for failure to establish and maintain a supervisory system or written procedures reasonably designed to detect and prevent such extreme concentration in illiquid products.

Read the full AWC here: FINRA AWC – Kingswood Capital

Recent Arbitration Claim Filed by Iorio Law

Iorio Law PLLC has recently filed a new FINRA arbitration statement of claim against Kingswood Capital on behalf of an investor who suffered significant losses from GWG L Bonds.

The claim includes allegations that Kingswood Capital, through its brokers, recommended that the Claimant borrow money via a securities-based loan against newly deposited funds to invest $125,000 into three speculative, high-risk, illiquid, and high-commission alternative investments and/or private placement offerings.

The claim alleges the firm’s actions constituted unsuitable and misleading investment recommendations, as the brokers leveraged client funds to purchase high-risk GWG L Bonds that were fundamentally incompatible with the investor’s financial goals. Furthermore, the claim details how Kingswood Capital misrepresented and omitted material facts by failing to disclose the speculative nature of these securities and the mounting financial instability of the issuer.

Central to the claim is Kingswood Capital’s failure to conduct reasonable due diligence regarding GWG L Bonds and GWG Holdings, Inc. Proper diligence would have revealed significant “red flags” long before the company’s collapse. These allegations drive our effort to hold the firm accountable for the client’s devastating financial losses.

GWG L Bonds & Recovery Options

For most investors, the bankruptcy court offers little hope. The GWG Wind Down Trust currently projects a nominal recovery of only around 2.7% to 3.45% of the original principal.

To put this in perspective: For every $1,000 invested, a bondholder may only see a return of about $26.94 to $34.46.

Furthermore, there is no confirmed date for when these fractional payments will begin, with current projections suggesting that investors will remain empty-handed until at least later in 2026. Given these “pennies on the dollar” projections, FINRA arbitration has become the most viable path for meaningful recovery.

Arbitration allows you to pursue claims against your brokerage firm—rather than the bankrupt issuer—for the sale of unsuitable investments. These claims are separate from the bankruptcy liquidation and focus specifically on broker misconduct.

Stay informed by checking our GWG L Bond Update Blog for the latest news on trust distributions and regulatory actions.

About Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered more than $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Kingswood Capital — or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

Recent developments—including loan defaults, suspended distributions, allegations of misappropriation of investor funds, and multiple Versity Investments lawsuits and Crew Enterprises lawsuits—raise significant concerns for investors and for the broker-dealers who recommended this offering.

If you invested in Apex South Creek DST, contact us for a free consultation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

What Is Apex South Creek DST?

Apex South Creek DST is a Delaware Statutory Trust formed to acquire a newly built Class A multifamily apartment community located at 3060 Southcreek Blvd., Orlando, Florida.

The offering was created and managed by Versity Investments, LLC (formerly NB Private Capital) and affiliated entities now operating under Crew Enterprises, LLC.

Broker-dealers marketed Apex as a stable, income-producing 1031 investment. However, at the time of the offering, the principals of Versity Investments, LLC were already alleged to have diverted and misappropriated syndicated funds away from other DSTs. Further, recent developments demonstrate that the investment has become deeply distressed and may have been unsuitable for many investors.

Who Sold Apex South Creek DST?

Based on information obtained to date, and upon information and belief, Apex South Creek DST was sold to investors by:

• Brian Nelson of Emerson Equity, LLC
• Don Linzer of Coastal Equities, Inc. (now Realta Equities, Inc.) and Great Point Capital LLC

These firms and representatives are believed to have sold Apex South Creek to retail investors, including 1031-exchange clients who relied on their brokers’ recommendations and due diligence.

Broker-dealers earned substantial commissions—often 5% to 7%—for selling interests in Apex South Creek DST. Those commissions created strong incentives to push high-risk DST offerings regardless of suitability.

Emerson Equity served as the managing broker-dealer for many Versity-sponsored DSTs, meaning it played a central role in supervising the due-diligence process and coordinating sales through participating broker-dealers.

Coastal Equities (now Realta Equities) has been associated with multiple high-risk alternative investment sales, including other DSTs that later experienced distress.

Upon information and belief, Coastal Equities and Great Point Capital were some of the largest sellers of DSTs sponsored by Versity Investments.

Other Broker-Dealers That Sold Versity-Sponsored DSTs:

Multiple other broker-dealers have sold Versity Investments / Crew Enterprises-sponsored DST offerings, including:

• Purshe Kaplan Sterling Investments
• Lion Street Financial
• Stonecrest Capital Markets
• Westpark Capital, Inc.
• IBN Financial Services, Inc.
• Dempsey Lord Smith, LLC
• WealthForge Securities, LLC
• AAG Capital, Inc.
• Cape Securities, Inc.
• Aurora Securities, Inc.
• Capulent, LLC

These firms appear across various Versity-sponsored DSTs, such as The Walk, Vintage, Hayworth Tanglewood, One on 4^th, Nine, and others that are now experiencing distress, suspended distributions, or litigation.

The presence of such a wide network of selling broker-dealers underscores the industry-wide distribution of Versity-sponsored DSTs and the potential systemic due-diligence failures related to these offerings.

Distributions to Investors Have Been Suspended:

Multiple investors report that Apex South Creek DST distributions have been suspended, leaving investors without expected monthly income.

The suspension occurred despite the sponsor’s earlier “yield enhancement” marketing, which temporarily increased stated rent to investors using sponsor-funded payments—a red flag indicating that actual property cash flow was likely insufficient to support stated distributions.

Suspended distributions often correlate with impaired property operations and may significantly reduce investors’ ability to recover principal upon sale or refinance.

They are a major indicator of financial distress and are highly relevant to Reg BI and suitability analyses for broker-dealers that recommended the DST.

Apex South Creek Faces Severe Loan Defaults and Multimillion-Dollar Judgments:

Recent court filings show that Apex South Creek is in significant financial distress, including:

$47 Million Judgment Against Versity Invest

Lenders obtained a judgment of approximately $47 million against Versity Invest, LLC, the guarantor for the Apex South Creek financing.

Lender Lawsuit Against Project-Level Borrower

The lenders are also pursuing the project-level borrower, Apex South Creek IB, LLC, another Versity-controlled entity.

Key Allegations From Court Filings

According to sworn lender allegations:

• Original principal across the notes totaled $42 million.
• Maturity dates were extended three times (ultimately to May 18, 2024).
• No interest payments have been made since November 2023.
• Apex South Creek has allegedly been in default for months.
• Outstanding principal as of March 31, 2025 is $34,114,356.
• Total amounts due now exceed $42,953,401.

The lenders also allege that Versity misappropriated syndication proceeds, meaning investor-raised capital was allegedly diverted for improper uses—forcing the lenders to “involuntarily fund” part of the Apex South Creek transaction.

This allegation mirrors claims made in other Versity Investments lawsuits and Crew Enterprises lawsuits, strengthening concerns that the problems at Apex are not isolated.

Investors Sue Apex South Creek DST: Claims of Willful Misconduct and Fraud

Separately, Apex South Creek DST investors have filed litigation in the Delaware Court of Chancery:

Apex South Creek DST, et al., 2025-0990-SEM (Del. Ch.)

The investor petition seeks to remove the DST trustee, citing:

• Willful misconduct
• Fraud
• Gross negligence
• Breach of fiduciary duty

A DST trust-removal action is exceptionally rare and typically occurs only when investors believe the sponsor or trustee engaged in serious wrongdoing.

Serious Allegations Against Versity, Crew Enterprises, Blake Wettengel, and Tanya Muro:

Apex South Creek is not the only DST sponsored by Versity/Crew facing problems.

Multiple lawsuits—including the KHCA/Knights Hill, Nelson brothers, and other DST investor actions—allege that: Blake Wettengel and Tanya Muro through Versity Investments, Versity Invest, and Crew Enterprises diverted and misappropriated syndicated proceeds, “commingled funds,” paid themselves unapproved bonuses, and extracted excessive “partnership expenses.”

In several DSTs, these issues have allegedly contributed to:

• Suspended distributions
• Loan defaults
• Massive deficits in operating and reserve accounts
• Risk of foreclosure
• Investor capital impairment or loss

These allegations form the basis of several ongoing legal actions—making Apex South Creek part of a larger pattern of sponsor misconduct.

Why Broker-Dealers May Be Liable for Apex South Creek DST Losses:

Broker-dealers who recommended Apex South Creek DST may be liable for investor losses if they:

• Failed to conduct adequate due diligence on Versity Investments or Crew Enterprises
• Failed to detect and disclose material information about Versity, Crew, Wettengel, and Muro, including regarding past allegations of defrauding investors and misappropriating investors’ syndicated proceeds
• Ignored red flags about the sponsor’s financial condition
• Recommended an illiquid, high-risk DST to unsuitable investors
• Misrepresented stability, income expectations, or the true risks of the investment
• Violated Regulation Best Interest (Reg BI) or FINRA Rules 2111, 3110, and 2210

Due diligence failures are especially significant given the now-public allegations of:

• Diversion of investor funds
• Sponsor cash-flow manipulation
• Repeated problems across multiple Versity-sponsored DSTs
• Financial distress predating the suspension of distributions
• Severe governance failures and trustee misconduct claims

Given that allegations of misappropriation surfaced as early as 2020, a reasonable due-diligence inquiry would have identified material red flags requiring enhanced scrutiny

FINRA arbitration is often the most effective way for investors to recover losses against the broker-dealers involved.

What Apex South Creek Investors Should Do Now:

If you purchased Apex South Creek DST—or are researching the latest Versity Investments lawsuit update or Crew Enterprises lawsuit update—you may have strong legal claims.

You may be entitled to recover losses for:

• Unsuitable recommendations
• Misrepresentations and omissions
• Failure to conduct due diligence
• Reg BI violations
• Failure to supervise
• Breach of fiduciary duty

You do not need to sue the sponsor; your claims are typically against the broker-dealer in FINRA arbitration.

Iorio Law PLLC Represents Versity-Sponsored DST Investors Nationwide:

Iorio Law PLLC is a national securities arbitration firm representing investors in claims involving DSTs, private placements, alternative investments, and broker-dealer misconduct.

Our attorneys have recovered tens of millions of dollars for investors harmed by unsuitable investment recommendations involving high-risk, complex investment products.

If you invested in Apex South Creek DST or any other Versity-sponsored DST, contact us today to review your legal rights.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

• GWG L Bonds Update (April 2026): Q4 2025 Status Report Confirms Dismal 3.78% Recovery for Bondholders (April 8, 2026)

• GWG Bankruptcy Settlements Approved: Wind Down Trust to Pay Pennies on the Dollar — Investors Must Act Now (January 2026) (January 19, 2026)

Original Post:

Below is the latest information for GWG L Bond investors following the November 17, 2025 joint status report filed by the GWG Wind Down Trust and the GWG Litigation Trust.

Quick Summary (Investor Snapshot)

• Payout timing: No distribution date announced. Unlikely before 2026.
• Projected recovery: Still 2.694% – 3.446% of invested capital.
• Cash available: Approx. $22.96 million transferred to the Wind Down Trust from settlements.
• Litigation update: $50.5 million D&O insurance settlement preliminarily approved; final hearing set for January 13, 2026.
• Trustee issues: Former Trustee Elizabeth Freeman resigned; motions pending regarding claw back of fees and appointment of a new trustee.
• Criminal charges: Former CEO Bradley Heppner indicted for securities fraud (DOJ, SDNY).
• Investor takeaway: Bankruptcy recovery remains pennies on the dollar—FINRA arbitration remains the only meaningful path to substantial recovery.

Visit Iorio Law PLLC’s GWG L Bond Investor Recovery Center for the latest information about our firm’s investigation.

The November 2025 Status Report: What Investors Need to Know

On November 17, 2025, the GWG Wind Down Trust and GWG Litigation Trust filed a joint status report with the U.S. Bankruptcy Court, providing an update through September 30, 2025.

This update comes amid significant turmoil:

Trustee Resignation & Court Motions

• Early November 2025: Trustee Elizabeth Freeman resigned as Wind Down Trustee.
• Mid-November: Bankruptcy Judge Marvin Isgur was recused from the case following an ethics scandal.
• November 18, 2025: U.S. District Judge Alia Moses referred pending motions to Chief Bankruptcy Judge Eduardo V. Rodriguez.
  • Motions include:
    • A request to claw back all trustee fees previously paid to Ms. Freeman
    • A request to appoint a new Wind Down Trustee

DOJ Criminal Charges

Weeks before the status report, the U.S. Department of Justice charged former GWG CEO Bradley Heppner with securities fraud, wire fraud, and falsification of records in the Southern District of New York.

D&O Settlement

In September 2025, the U.S. District Court for the Northern District of Texas preliminarily approved a $50.5 million D&O insurance settlement connected to the GWG class action.

A final approval hearing is scheduled for January 13, 2026.

Key Takeaways From the November 17, 2025 Filing

1. Litigation Trust Recoveries

Total settlement proceeds collected: ~$31.9 million, including:

• Mayer Brown LLP — $21 million
• Whitley Penn LLP — $8.5 million
• Sabes defendants — $2.3 million
• Five additional parties — $110,333

After litigation expenses, $22.96 million was transferred to the Wind Down Trust.

2. Litigation Trust Expenses Exceeded Funding

The Litigation Trust has spent ~$4 million, approximately $1 million more than provided for under the confirmed plan. The Litigation Trust plans to replenish and add to legal reserves from future settlements.

3. D&O Settlement

The Court preliminarily approved the $50.5 million D&O settlement.

4. Bankruptcy Recovery Remains Extremely Low

The November status report confirms no material change.

GWG L Bond investors are projected to receive only 2.694% to 3.446% of principal.

This remains roughly $26.94 to $34.46 per $1,000 invested.

When Will GWG L Bond Investors Receive Payouts?

As of November 18, 2025:

• No distribution date has been set.
• No payments are expected before 2026.
• Even if a distribution occurs, investors should expect only pennies on the dollar.

Example:

• A $100,000 investment may return $2,694 – $3,446, at most.

Why FINRA Arbitration Remains the Best Reconvey Path

Given the near-worthless bankruptcy outcome, FINRA arbitration claims against the broker-dealers who sold GWG L Bonds remain the only realistic chance for meaningful recovery.

Why?

• Brokerage firms earned up to 8% commissions, creating powerful sales incentives.
• Many firms ignored red flags, including accounting failures, auditor resignations, SEC investigations, and GWG’s shift into risky alternative asset exposure.
• FINRA and the SEC have sanctioned or charged more than 15 firms and brokers, including:
  • Emerson Equity
  • Tony Barouti
  • Western International Securities
  • Arete Wealth Management

GWG L Bond Arbitration Win Rate

Investors have won 18 of 20 FINRA hearings (90%) nearly three times the average FINRA customer win rate.

Iorio Law PLLC, led by attorney August M. Iorio, has already recovered more than $4 million for GWG L Bond investors nationwide.  Iorio Law PLLC represents clients on a contingency-fee basis—no recovery, no fee.

Why Choose Iorio Law PLLC?

Attorney August M. Iorio has already recovered more than $4 million for GWG L Bond investors and was among the first attorneys in the country to aggressively pursue these claims.

Our Track Record:

• 800+ cases resolved nationwide
• Nearly $100 million recovered for investors
• $4M+ recovered for GWG L Bond investors
• Nationally recognized for securing the first-ever FINRA award against Robinhood over its 2021 trading restrictions
• January 2025: Won a control-person liability case in FINRA Arbitration No. 24-00004 involving a GWG L Bond sale

What you get with Iorio Law PLLC:

• ✅ No recovery, no fee
• ✅ Highly personalized representation
• ✅ Extensive experience with GWG cases
• ✅ Efficient Process ( 6–18 months typically)
• ✅ Nationwide representation from New York City

Client Testimonials – ⭐ ⭐ ⭐ ⭐ ⭐

• ★★★★★ “Working with August Iorio on a matter involving GWG L Bonds was a great experience! He took the time to explain the process… I highly recommend him.” — Darcey M.

• ★★★★★ “He was a man of his word and negotiated a fair settlement… I would absolutely recommend Mr. Iorio.” — Brian B.

• ★★★★★ “Efficient, fast, very knowledgeable… I highly recommend him.” — Mahmood A.

• ★★★★★ “An extraordinary job… I received an excellent outcome because of Mr. Iorio.” — Henry L.

• ★★★★★ “Accomplished what we thought was impossible… Attorney Iorio took it on and was a bulldog.” — Allan F.

Explore Your Options: Free Case Evaluation

If you purchased GWG L Bonds through Emerson Equity, Western International Securities, Arete Wealth Management, Aegis Capital Corp—or any other broker-dealer—contact us for a free, confidential case evaluation.

Time is running out for investors who purchased in late 2019 and 2020 due to FINRA’s six-year eligibility rule.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form